I would say, as a precursor, there is nothing wrong with financing the fifth cellphone provider or the 12th luxury hotel. To drive business, capital cities need good places for people to stay. They need good cellphone networks.
The point I'm making is not so much about the nature of the investment in terms of the type of project the money is going toward. Rather, it's about the fact that it's already a crowded space. If you want to finance a hotel, which I think is a legitimate thing to help catalyze investment, think about doing it in N'Djamena, Niamey, or Ouagadougou, rather than Nairobi or Accra, which are already attracting a lot of that kind of investment.
As to the sorts of projects that can be really game-changing, it varies from country to country. As an easy example, consider Haiti, where I did a lot of work with the UN in the wake of the earthquake that was so devastating. Rebuilding there is substantially constrained by the fact that there is only one cement plant. You simply cannot build infrastructure when you have only one source of cement in the country. You have to look at key bottlenecks like that.
Often the transportation grid or network between ports and capital cities is inadequate in some form or another. There may not be a decent road. There may not be electricity along that road. The port itself might not be great. There might not be a cold supply chain from the interior to the port. Those are all key bottlenecks.
If you look at the Democratic Republic of the Congo, they have the potential for such massive hydro development in the south of the country that they could be supplying electricity to all of southern Africa and most of east Africa. There are some pieces of the grid there that, if filled in, would permit that kind of network effect to take place.
It is useful to look at projects that relieve bottlenecks and allow a lot of other complementary aid-financed and private sector activity to flourish, because such projects provide a way for a DFI to have a truly major impact for a relatively small amount of catalytic financing.