Economic impacts of infrastructure investment with different funding mechanisms: evidence from Guinea-Bissau

Figures & data

Table 1. Share of formal and informal activities in the agricultural sectors, 2014

Sector	Informal activity	Formal activity	VA share	Weighted informal	Weighted formal
	I	II	III	I*III	II*III
1. AGRV	0.793	0.207	0.243	0.193	0.05
2. AGRE	0.793	0.207	0.154	0.122	0.032
3. MINES	0.793	0.207	0.032	0.025	0.007
4. IND	0.793	0.207	0.11	0.087	0.023
5. CTP	0.1	0.9	0.015	0.002	0.014
6. SER	0.1	0.9	0.223	0.022	0.201
7. SERNM	0.1	0.9	0.223	0.022	0.201

Sources: The Authors’. Note: Sector is the number and sector; Informal activity is the share of informal activity in that sector, formal activity is the share of formal activity in that sector; VA share is the sectorial share of all agricultural activities; Weighted informal is the weighted share of the informal activities; Weighted formal is the weighted share of the formal activities. VA share is the sector share in agricultural value added (Source: Faostat—crops production; and World Bank Development indicators, WBDI—Value added by macro sector).AGRV, AGRE, MINES, IND, CTP, SER, SERNM is the agricultural food, agricultural exports, Mining, Industries, Construction and Transport, Services, and Non-tradable services activities, respectively.

Table 2. Household disaggregation by minimum wage

Household type	Rural	Urban	Wage limit	Wage in Franco CFA	Share
Household 1	HR1	HU1	≤ 1 minimum wage	$ 50,000*	0.077
Household 2	HR2	HU2	$\ge$ 1 minimum wage	$ 600,000	0.923

Source: The Authors. Note: Household type is household classification by effective received wage. Type of HR1 Household 1 is rural household receiving up to one minimum wage. Its urban counterpart is HU1. Wage limit is the maximum amount the household can receive. In general, we observe that each household receives wage below this bound. Wage in Franco CFA is the current official wage in 2014 (source: INEC-MICS, 2014). * 50,000(=$ US 93) is the minimum wage. The wage below the minimum is 10,000 CFA Francs (=$US 19). Individuals in this category (HR1 and HU1) are said to live in extreme poverty as defined by the World Bank. HR1and HU1 is the rural and urban household that receives at most a minimum wage, respectively. HR2 and HU2 is the rural and urban household that receives six or more minimal wages, respectively. Share is the proportion of the household wage in total wage.

Table 3. Simulations of different scenarios for infrastructure investment

Reference Scenario
Business as Usual	Growth of 2 % per year for the 2014–2030 period (from t to t + 16)
Funding schemes
Scenario 1	1% increase in infrastructure investment of 16 years funded 100% by natural resource revenues
Scenario 2	1% increase in infrastructure investment of 16 years funded 50% by debt and 50% by external aid
Scenario 3	1% increase in infrastructure investment of 16 years funded 50% by debt and 50% from income tax
Scenario 4	1% increase in infrastructure investment of 16 years funded 50% by debt and 50% from firm tax

Source: The authors.

Figure 1. GDP growth path (%).

Source: The authors.

Figure 2. Government real income (%).

Source: The authors.

Figure 3. Public deficit (%).

Source: The authors.

Figure 4. Private investment (%).

Source: The authors.

Table 4. Externalities and value-added (% in t + 16)

Sector	Externalities (${\theta }_{i,t})$				Value added ($V{a}_{i,t}$)
	Scenario 1	Scenario 2	Scenario 3	Scenario 4	Scenario 1	Scenario 2	Scenario 3	Scenario 4
AGRV	0.344	0.385	0.024	0.022	0.35	0.411	−1.319	−0.771
AGRE	0.121	0.135	0.021	0.024	−1.005	−0.967	−2.254	−1.054
MINES	0.011	0.012	0.011	0.011	−0.407	−0.395	−0.597	−0.209
IND	0.344	0.385	0.005	0.052	0.091	0.088	−0.629	−0.396
CTP	0.141	0.157	0.044	0.044	0.201	0.202	−0.717	−0.516
SER	0.214	0.24	0.02	0.02	−0.772	−0.741	−1.557	−0.688
SERNM	0.438	0.49	0.048	0.048	1.743	1.602	5.638	4.184

Source: The authors. Note: AGRV, AGRE, MINES, IND, CTP, SER, SERNM is the agricultural food, agricultural exports, Mining, Industries, Construction and Transport, Services, and Non-tradable services activities, respectively.

Table 5. Employment (% in t + 16)

Household	Scenario 1	Scenario 2	Scenario 3	Scenario 4
Usk1	5.296	2.800	−1.657	−1.723
Uks2	0.569	0.055	−0.931	−0.962
Sk1	1.430	0.336	−1.160	−0.258
Sk2	0.364	0.051	−0.298	−0.837

Source: The authors. Note: Usk1 and Sk1 is the rural and urban household that receives at most a minimum wage and offers unskilled and skilled labor, respectively. Usk2 and Ss2 is the rural and urban household that receives at least a minimum wage and respectively offers unskilled and skilled labor

Table 6. Household level impacts (% in t + 16)

Household	Household real income				Household real consumption
	Scenario 1	Scenario 2	Scenario 3	Scenario 4	Scenario 1	Scenario 2	Scenario 3	Scenario 4
HR1	2.513	2.331	−5.214	−2.906	0.621	0.512	−1.522	−1.007
HR2	2.451	2.411	−5.504	−3.118	0.597	0.593	−1.945	−1.307
HU1	2.486	2.28	−5.009	−3.163	0.562	0.464	−3.004	−1.354
HU2	2.425	2.35	−5.265	−3.363	0.536	0.533	−3.266	−1.557

Source: The authors. Note: Household is the household type by effective received wage. HR1 and HU1 is the rural and urban household that receives at most a minimum wage, respectively. HR2 and HU2 is the rural and urban household that receives more than a minimum wage, respectively.

Figure 5. Consumer price index.

Source: The authors.

Table 7. Household saving (% in t + 16)

Household	Scenario 1	Scenario 2	Scenario 3	Scenario 4
HR1	2.513	2.331	−5.532	−2.906
HR2	0.23	0.047	−2.544	−1.618
HU1	2.451	2.28	−6.838	−3.163
HU2	2.425	2.35	−7.09	−3.363

Source: The authors.

Figure 6. Dynamic trajectories of income inequalities.

Source: The authors.

INEC (Institute National of Statistics)-MICS (Guinea-Bissau Multiple Indicators Survey. (2014). Available on: https://mics.unicef.org/surveys

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Data availability statement

Data will be shared upon request.