While the infrastructure and infrastructure services gap in Africa remains high, there is increasing activity and investment efforts on the continent against a background of an ambitious long-term plan for closing Africa’s infrastructure gap, called the Programme for Infrastructure Development in Africa (PIDA), that African heads of state and government endorsed in 2012.
PIDA PAP1 consisted of over 400 projects, including 54 energy projects (hydropower plants and interconnectors), 236 transport projects,114 for ICT sector and 9 transbundary water projects. These sectors are sensitive to the adverse impacts of climate change, such as droughts, heat waves, and more frequent and intense floods and especially water and energy sectors.
The energy projects include 10 hydropower plants of over 22 gigawatts capacity, notably the Inga-3,which is under negotiation for financing and the Grand Ethiopian Renaissance Dam it is under construction.
The infrastructure projects identified in PIDA require investments in the order of $360 billion by 2040.
Of the $81.6 billion invested, 42.1 percent came from national governments, 23.8 percent came from China, and 24.1 percent came from bilateral donors, multilateral agencies and African institutions. By contrast, the private sector accounted for just 2.8 percent.
All this shows theres a need for more financing from private sector.To that effect efforts have been made to provide a legal framework for private sector investment infrastructure.
Most of the investments were in transport (41.7 percent), energy (30.4 percent) and water (16.2 percent) all sectors that are sensitive to the adverse impacts of climate change.
Closing the Gap
Africa’s infrastructure and the huge investments needed to close the gap are very much at risk from climate change. There is thus an urgent need to ensure that climate resilience is integrated into the planning and implementation of infrastructure investments on the continent.
Furthermore, major investments will have to come from the private sector, so there is growing demand for institutions to declare climate risk exposure of their investments. This presents a great opportunity for Africa.
Based on best practices and experience from all the continent As an infrastructure development latecomer, Africa can take advantage of advances of lesson learn and new technology, the falling costs of low-carbon technologies, and the need to diversify and strengthen the macroeconomic basis of economies.
It can also learn from the experiences of other global regions in order to leapfrog and build infrastructure that is, from the outset, robust, resource-efficient, and able to perform both today and in tomorrow’s uncertain climate.
This year PIDA week is being held in Cairo, Egypt under the theme Positioning Africa to deliver on Agenda 2063 and economic integration through multi-sectorial approaches to infrastructure development.
It is worth mentioning that AUC and NEPAD are preparing the next phase of PIDA
In his opening remarks AUDA-NEPAD CEO Dr Ibrahim Mayaki said Infrastructure is clearly inscribed in Agenda 2063 which recognizes the role of infrastructural development as a means to accelerate development, maintain or improve current growth rates.
He added that World Class Infrastructure Criss-crosses Africa One of the intended outcomes of PIDA is to address issues of economic marginalization and social exclusion by facilitating the creation of economic opportunities and decent employment.
The CEO further said that it is estimated that up to 15 million new jobs could be created through the construction, operation and maintenance of PIDA projects. And many more will be created through increased economic activity on the continent that infrastructure development will bring.
Adding that AUDA-NEPAD has developed the PIDA Job Creation Toolkit- AFRICAN UNION DEVELOPMENT AGENCY-NEPAD which serves to demonstrate the job creation potential of PIDA projects. The Toolkit is already in operation.
Regarding the implementation of the AfCFTA, “we will support the work of the Secretariat that will be based in Accra, Ghana. I believe that our capacity to work on “soft infrastructure” and help remove nontariff obstacles to intra-trade on the continent will be key for the success of this free-trade area” he noted
Dr Mayaki underlined accountability African Union’s Programme for Infrastructure Development in Africa (PIDA) and its associated instruments has enabled the continent to make remarkable progress in the reconstruction, rehabilitation and development of infrastructure on the continent.
AU Commissioner for Infrastructure and Energy, Amani Abou-Zeid said that the PIDA Week is an important plat form to evaluate the achievements and challenges the continent is facing in infrastructure development and the plan for the future.
Abou-Zeid said the African heads of states have demonstrated a strong commitment towards the realization of flagship projects of the Agenda 2063. She said that five regional infrastructure projects from each region will be selected adding that a project selection criteria was prepared with a participatory approach has been adopted yesterday.
She touched on the need to attract private investments and utilizing pension and sovereign funds. “We should learn from our errors and focus on the projects that we are going to implement in the next ten years. We should learn how we can be more attractive to investment. We should re-draft how we present bankable projects so as to be able to bring investments from the public and private,” she added.
Barbara Schaefer, representative of Germany, noted that Germany was supporting infrastructure development projects in Africa as it understands the need for regional economic integration and overcoming borders. Germany is supporting various instruments including job creation tool kit and network of women in infrastructure. “We focus on private sector involvement and de-risking mechanisms,” she said.
Mamady Souare, Manager, Regional Integration Operations Division, AfDB, said the role of the private sector in infrastructure development was fundamental. Souare stressed the need for blending international and national fundings. With regards to risk Souare said AfDB assists the private sector in doing risk assessment.
Robert Lisinge, Chief of Energy, Infrastructure and Services Section, UNECA, highlighted the political and regulatory risk the private sector faces. “Different countries have different investment climates. Capacity issues-There is lack of capacity to prepare bankable projects,” he said. He also noted most African countries lack the capacity to negotiate with the private sector. The UNECA has drafted a model law for regional infrastructure. Currency stability was the other challenge Lisinge cited.
A representative of the African Import Export Bank noted that the bank has been working on capacity building, and de-risking mechanism , which are key to unlocking capital. The bank is working with 51 out of the 54 member states. The representative highlighted the need to work on inter state guarantee. “Access to information is a huge gap. We created a trade information portal,” she said. She said access to foreign currency for instance USD, is also a huge challenge, she added.
Representative of the EU Mrs. Carla Montesi, reaffirmed the commitment of the EU in supporting Africa’s regional economic integration. According to Motensi, the EU has provided one billion euro for energy, transport and ICT development projects per year in the past last seven years. The need to bridge the financing gap is still present.Last week the EU pledged to extend 1.6 billion euro grant at the African Investment Forum.
HE Ambassador Khaled Emara, Assistant Foreign Minister for African Organizations and Communities and Personal representative of the President of the Arab Republic of Egypt to AUDA-NEPAD, stated that weak infrastructure in Africa is obstructing economic growth. Ambassador Emara stressed the need to expedite infrastructure development projects to achieve the 2063 development agenda
By Angel Navuri – Guardian reporter