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Infrastructure report offers 5-point plan

A new report from port owner and operator DP World, in association with the Economist Intelligence Unit, includes a 5-point plan to help tackle Africa’s infrastructure gap. Despite a sharp increase in investment and the completion of some notable projects, the pace of infrastructure development has failed to keep up with the continent’s strong economic growth, placing additional strain on Africa’s existing infrastructure assets.

Annually, some $90 billion in infrastructure investment is required to close the infrastructure deficit, with only about half of that amount being currently available, according to the report, “Africa at The Crossroads: Bridging the Infrastructure Gap”, which was published at the Africa Global Business Forum which was held in Dubai last week.

“Our ports in Africa have shown us how the region has enjoyed strong growth over the last 10 years, leading to rising incomes, falling poverty and a step toward economic diversification,” said DP World’s Chairman, H.E. Sultan Ahmed bin Sulayem. “However, all this has also placed an increasing strain on existing inland and marine infrastructure. If Africa’s countries and regions were better connected, market sizes would increase and encourage greater foreign investment.”

The report highlights the importance of the role played by public-private partnerships, domestic bond financing and the need to monitor the life cycle of infrastructure by maintaining and upgrading existing stock to help enhance trade integration and improve trade facilitation.

The Public-Private Partnership (PPP) model, is particular, in becoming increasingly significant, with several African governments designing policy to accelerate infrastructure projects. A growing number of natural resources contracts handed out by the continent’s governments now include an infrastructure industrialization component whereby the companies need to invest in new infrastructure as part of the deal.

While projects like South Africa’s Gautrain rapid rail transit system and the new railway connecting Mombasa and Nairobi in Kenya offer encouraging examples of world-class infrastructure delivery on the continent, Africa’s growth is moving at a rate with which its infrastructure cannot keep up. However, the report finds that range of policies from regional free trade agreements to improved PPP frameworks across a large number of countries are starting to happen, which suggests that the enabling environment for infrastructure development is improving. If momentum can be maintained and accelerated, then it could help the continent overcome its critical deficits and seize the economic transformation that now lies within its grasp.

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