Tackling Africa's Infrastructure Gap
A growing gap between infrastructure and GDP growth in Africa is creating a potential demand for new projects and with it greater breakbulk volumes, a new report by port operator DP World suggests.
The study, entitled Africa At The Crossroads: Bridging The Infrastructure Gap, was produced in association with the Economist Intelligence Unit and outlines strategies to tackle the perceived infrastructure gap.
“African countries need a solid foundation on which to place the building blocks of their economies. Both soft and hard infrastructure is needed, which will determine how quickly physical assets are built and how quickly trade develops,” DP World Chairman Sultan Ahmed Bin Sulayem said.
The report suggests that as much as US$93 billion will be needed per year to meet projected demand for new infrastructure. This is about double the amount that is currently available and would equate to 10 percent of total African GDP.
Public-private partnerships, or PPPs, are expected to play a key role in bringing some of this extra investment into play as African governments slowly develop the necessary soft infrastructure, such as legal and regulatory frameworks, to support private investors.
“PPPs are an increasingly popular model to fund projects,” Bin Sulayem said, “Today, a growing number of the new natural resource contracts that African governments hand out have an ‘infrastructure industrialization’ component – requiring the company in question to invest in new infrastructure.”
Alongside greater prevalence of PPP models the report’s authors also advocate greater integration of intra-African transportation systems to drive trade and as such support a pan-Africa free trade agreement.
Discussing the many successful projects in the continent that exhibit “world-class infrastructure delivery” the study highlights South Africa’s Gautrain rapid rail transit system, the Inga Dam in the Democratic Republic of Congo and Kenya’s new railway connecting Nairobi with Mombasa.
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