Evidence illustrates that investment ininfrastructure is essential to accelerate inclusive growth.Indeed, a number of Sub-Saharan African (SSA) countries havebegun to devote greater resources to large-scale publicinvestment projects. Nevertheless, while massive projectscan potentially generate large benefits there areconsiderable risks. Cost overruns, poor implementationquality, inadequate operational and maintenance capacity,and negative social or environmental impacts can severelyundercut a project’s anticipated social and economicreturns. Moreover, projects, which are expensive to developand maintain can impact on debt dynamics and in some casesmacroeconomic stability. Yet, given the complex nature ofsuch projects it is often difficult to ascertain whether itis worthwhile to proceed with a project and if so, howshould it be financed and implemented. Historically,computable general equilibrium (CGE) models have been usedto assess the prospective impacts of large public investmentprojects. However, such models are a complex andtime-consuming process and are often too broad to preciselycapture the localized impact of specific projects. Thispaper proposes a simple, but more user-friendly model. Byinputting information on the project’s construction,operation, and anticipated returns, the user is able toassess the project’s net impact on the economy and weigh upthe costs and benefits of different approaches. The modelwas developed in response to a request from the Nigerienauthorities to assess the macroeconomic impact of Niger’sKandaji Dam project. It found that while costs would equalmore than 10 percent of 2013 GDP during 2014-48, theexpansion of domestic production spurred by increased demandduring the construction phase will increase GDP by 0.25percent above the baseline projection and boost fiscalrevenues by an additional 0.45 percentage points of GDP.
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