INFRASTRUCTURE IS THE
INFRASTRUCTURE IS THE KEY TO GROWTH The AU’s Programme for Infrastructure Development in Africa is focussed on physical infrastructure developments such as protecting and enhancing transboundary water resources. Africa needs reliable infrastructure to connect supply chains and efficiently move goods and services across borders, says Julien Fouilliart, the Africa Market Leader for Building & Infrastructure at Bureau Veritas, one of the world’s leading certification bodies. Leveraging the momentum of Africa’s infrastructure development and harmonising regulatory compliance standards will help to build sustainable and inclusive growth. I 28 Infrastructure development is an essential driver for progress on the African continent and has the potential to be an enabler of sustainable and inclusive economic growth. The economy needs reliable infrastructure to connect supply chains and efficiently move goods and services across borders. The recent multifaceted crises, including climate-related issues, the Covid-19 pandemic and the conflict between Russia and Ukraine have all strongly impacted countries’ debt surge, slowing down the emergence of large infrastructure projects. Although the direct trade and financial linkages of Africa with Russia and Ukraine are small, the war has damaged the continent’s economies through higher commodity, food and fuel prices as well as headline inflation. The recent political instability also threatens the appetite for foreign investments and commitment on high-impact infrastructure projects. Africa is projected to have the fastest urban growth rate in the world. By 2050, Africa’s cities will be home to an additional 950-million people, according to the Organisation for Economic Co-operation and Development (OECD). Much of this growth is taking place in small and medium-sized towns. Africa’s urban transition offers great opportunities, but it also poses significant challenges. Urban agglomerations are usually developing without the benefit of policies or investments appropriately able to meet these challenges. Despite having contributed the least to global warming and having the lowest emissions, Africa faces exponential collateral damage, posing systemic risks to its economies, infrastructure investments, water and food systems, public health, agriculture and livelihoods, threatening populations into higher levels of extreme poverty. Prioritising structural transformation that is green, inclusive and resilient will lay a foundation for resilience ahead of the next crisis. The continent is very diverse, composed of low, lower-middle, upper-middle and high-income countries. Taking advantage of rich natural resources, the continent has the potential to shape a new development path, maximising the potential of its resources and people. Finally, the African Continental Free Trade Area (AfCFTA) currently under development will be the largest free-trade area by the number of PHOTO: Gabriel on Unsplash
INFRASTRUCTURE FUNDING Green-building certification schemes have showed that they can be a useful tool for affordable housing development. A housing estate in Lagos, a city with a population estimated at about 20-million, is shown here. countries involved since the formation of the World Trade Organization, given Africa’s current population of 1.4-billion people, which is expected to grow to 2.5-billion by 2050. Africa needs to produce goods and services for domestic consumption and global trade to achieve sustainable economic growth and improve living standards. Africa cannot succeed without adequate high-quality linking infrastructure. The continent still faces serious infrastructure gaps across all sectors, both in access and quality. Most countries lag significantly behind the rest of the world in terms of coverage of key infrastructures including transport, infrastructure, energy, water, ICT, affordable housing and so on. A pipeline of potential projects exists but is slow on actualising. While funding is available, financial commitment and spend is lacking. Annually, there is a funding gap estimated at $100-billion for infrastructural development. Common vision and project preparedness In order to support infrastructure development, there is an indispensable need for government and multilateral banks to expand the flow of private sector financing into more commercially viable assets. Several projects fail to emerge due to weak feasibility study and business plans, delays in obtaining licences, approvals and permits, inability to agree on risk allocation and to secure offtake agreements, and poor programme delivery. Individual efforts by African countries to develop infrastructure have faced significant funding deficits due to the high costs involved. As a key element of the African Union 2063 strategy, African countries, through the AU and regional economic communities, have adopted the Programme for Infrastructure Development in Africa (PIDA) to address these inadequacies and enhance connectivity. PIDA aims to spearhead physical infrastructure development in transport, energy, ICT and transboundary water resources. In the first 10-Year Implementation Report of PIDA that was published in September 2023, the first phase of the programme over the period to 2020 indicates significant achievements, with the development of 16 066km of roads, 4 077km of railway lines, 7GW of hydroelectricity power production, 3 506km of transmission lines, 112 900 direct jobs and 49 400 indirect jobs. Over the past 10 years, -billion has been invested, with 0-billion required to implement all PIDA projects by 2040. While substantial commitments have been made, including contributions from AU member states, international financial institutions and other sources, it is imperative to explore additional ways to mobilise the necessary resources (such as private capital commitments via PPPs, green bonds and climate finance). Unlocking private sector investment is vital to reach the AU Agenda 2063 objectives. Local governments and regional multilateral institutions need to provide investors with a common vision, locally and globally. To ensure that the money is spent where it is needed, and delivers high-quality infrastructure on time and on budget, governments and private sector players need to step up to prepare, plan and manage projects with a new level of rigour and robustness. Regional integration as a major driver for development Regional integration is vitally important for sustainable development in Africa. For far too long, inadequate infrastructure has held the continent back from realising its full economic potential. Lack of access to reliable energy, poor transportation networks, including underdeveloped digital connectivity, have stalled Africa’s participation in the global market and prevented citizens from accessing opportunities. According to Julien Fouilliart, Africa Market Leader for Building & Infrastructure at Bureau Veritas, an independent entity and world leader in Testing, Inspection and Certification with a presence in 35 countries in Africa, “This is PHOTO: Ima Enoch on Unsplash 29
