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Investors sought to bridge Africa’s infrastructure divide

27 November 2015

Demand for power, roads, railways, internet and other infrastructure in Africa is set to soar in the coming years, providing investment opportunities and socio-economic benefits across the continent

 

Infrastructure has played a significant part in Africa’s recent economic upturn, and will need to play an even greater role if the continent’s development targets are to be reached. Simulations suggest that if all African countries were to catch up with Mauritius in infrastructure, per capita economic growth in the region could increase by 2.2 percentage points. Catching up with Korea’s level would increase economic growth per capita by up to 2.6% per year. In a number of countries – including Côte d’Ivoire, the Democratic Republic of Congo (DRC), and Senegal – the impact would be even larger.

In most African countries, particularly the lower-income nations, infrastructure is a major constraint on doing business and is found to depress productivity by around 40%. For many countries, the negative impact of deficient infrastructure is at least as large as that associated with corruption, crime, and financial market and red tape constraints. Power, or a lack of it, emerges as the most limiting factor in some areas, and is cited by more than half of firms in more than half of African countries as a major obstacle in doing business. In addition, deficiencies in broader transport infrastructure and infrastructure for information and communication technologies (ICT) are less prevalent, but nonetheless substantial in some cases.

Africa’s leading continental organizations all highlight the importance of regional infrastructure for the continent’s growth. The average economic growth rate for African countries, which is predicted to be 6% per year between 2010 and 2040, is driven by a surging population, increasing levels of education and technology absorption. This growth implies that, over the 30 years to 2040, the GDP of African countries will multiply sixfold, and the average per capita income will rise above $10,000 for all nations. This continuing expansion and prosperity will swell the demand for infrastructure, particularly in three main fields.

Firstly, power demand will increase from 590 terawatt hours (TWh) in 2010, to more than 3,100 TWh in 2040. This growth rate would be similar to India’s over the past three decades. Since 2005, the average annual rate of growth in Africa has exceeded 5%. To keep pace, installed power generation capacity must rise from present levels of 125GW to almost 700GW in 2040.

Secondly, transport volumes will increase by six to eight times, with a particularly strong increase of up to 14 times for some landlocked countries. Port throughput will rise from 265 million tons in 2009, to more than 2 billion tons in 2040.

Thirdly, ICT demand will swell by a factor of 20 before 2020 as Africa catches up with broadband. Demand, which stood at around 300 gigabits per second in 2009, will reach 6,000 gigabits per second by 2018.

This growing infrastructure demand presents a critical challenge for Africa as it competes in global and regional trade markets that rely on just-in-time production and flexible, speedy and reliable delivery. By just about any measure of infrastructure coverage – whether road density, telephone density, generation capacity or service coverage – African countries are lagging behind. In addition, the AfDB’s Private Sector Development Strategy estimates that infrastructure services in Africa cost twice as much on average as those in other developing regions and notes that tariffs are exceptionally high. East Asian firms save close to 70% in transportation costs compared to their African counterparts, while Latin American and South Asian firms save approximately 50%. Closing the infrastructure deficit is vital for economic prosperity and sustainable development. But it is a regional and continental problem that requires a regional and continental solution.

Two countries reaping the benefits of such vital investment, albeit in different ways, are Uganda and Angola. Last year the Ugandan government allocated half of its budget towards infrastructure. Moreover, according to the Ugandan Minister of Works and Transport John Byabagambi, a 10-year, $11 billion program has been planned to upgrade the country’s transportation network and power generation capacity. In addition, there are plans to invest $2 billion in roads this year and another $2.5 billion in the Standard Gauge Railway. Road transport is by far the most dominant mode of transport, carrying over 90% of passenger and cargo traffic, and with the number of cars being sold to an ever emerging Ugandan middle class, roads will be of even more importance in years to come.

Another infrastructure success story can be found in Angola – which has effectively been rebuilt in a little over 10 years following the end of a civil war that left the country in ruins. Angola has since made remarkable progress, something that can be attributed to judicious government projects such as the National Urbanism and Housing Program, designed to rebuild the country’s infrastructure.

The massive potential for infrastructure in Africa is beginning to attract international investors too, with this year seeing Ugandan President Yoweri Museveni and the China Harbor Engineering Company agreeing to a $3.2 billion, 476km railway route through Kenya, Uganda, South Sudan and on to Rwanda. With the potential for infrastructure investments in its current position it won’t be long before other parties are racing to get a slice of the action.


  • Africa Industrialization Week 2018 (AIW 2018) 18th - 23rd Nov 2018, by African Union Commission

    Africa Industrialization Week 2018 (AIW 2018) 18th - 23rd Nov 2018, by African Union Commission

    MEDIA ADVISORY

    AFRICAN UNION TO ORGANISE THE AFRICA INDUSTRIALIZATION WEEK 2018 (AIW 2018)

    INVITATION TO REPRESENTATIVES OF THE MEDIA

    What: AFRICA INDUSTRIALIZATION WEEK 2018 (AIW 2018)

    When: Sunday 18th – Friday 23rd November 2018

    Where: AU Headquarters, Addis-Ababa, Ethiopia

    Who: Organized by the Department of Trade and Industry of the African Union Commission (AUC)

    JOURNALISTS ARE INVITED TO ATTEND AND COVER THE OPENING CEREMONY AT THE AFRICAN UNION HEADQUARTERS ON 18TH NOVEMBER 2018

    The African Union Commission (AUC) plans to organize an Africa Industrialization Week (AIW) to be held from the 18th to the 23rd November 2018 at the AUC Headquarters in Addis Ababa, Ethiopia. The afternoon of 18th November 2018 is dedicated for the Official Opening Ceremony by the H.E Paul Kagame, Chairperson of the African Union and President of the Republic of Rwanda, High Level dignitaries from Member States, RECs, United Nations Agencies, Diplomatic Corps and Private Sector will attend the Opening session.

    The commemoration of the Africa Industrialization Day (AID2018) to be organized by the Department of Trade and Industry of the African Union Commission in partnership with the NEPAD Agency, United Nations Industrial Development Organization (UNIDO), the United Nations Economic Commission for Africa (UNECA), Regional Economic communities (RECs) and Development Partners. The Theme for the AID2018 and AIW2018 is: “Promoting Regional Value Chains in Africa: A pathway for accelerating Africa’s structural transformation, industrialization and pharmaceutical production”.

    Given the importance of Industrial development as an engine for inclusive and sustainable development, the AIW2018 seeks to enhance consciousness and understanding of the opportunities and challenges associated with the industrialization drive on the continent. This is meant to mobilize African leaders, policy makers, and private sector and development cooperating partners to enhance dialogue on the pan-African industrialisation agenda, with emphasis on how development of regional value chains can a be a major catalyst towards boosting industrial production capacity, and hence accelerated industrialization for the continent as we gear up on the implementation of the Africa Continental Free Trade Area.
    The AIW2018 will also among other things, promote the implementation of the Accelerated Industrial Development of Africa (AIDA), the Pharmaceutical Manufacturing Plan for Africa (PMPA), the SME Strategy, the Boosting Intra-African Trade and the African Continental Free Trade Area and the UN General Assembly's Third Industrial Development Decade for Africa (IDDA III) in the context of Agenda 2063.

    The 1st AU-NEPAD Africa Pharma Conference will be the flagship event of the Africa Industrialization Week (AIW). This event is co-organized by the Department of Trade and Industry, the Department of Social Affairs and the NEPAD agency. It will be held from the 19th to 21st November, 2018 with aim to contribute to efforts to boost local production of essential medicines. The conference will involve all relevant continental institutions, development partners, UN agencies, Member States and the private sector.

    The week will also be commemorated through a series of events which will highlight the progress, achievements, and challenges faced by African governments in developing their industrial sectors. It will also provide a platform for business to business interface, to enhance prospects for developing business partnerships and investment promotion.

    Some of the side events during the week will include:

     Continental Forum on Regional Value Chains and Mobilizing African Manufacturer’s (to support the linkage of Africa Regional Value Chains to the Global Value Supply);
     The Second Symposium on Special Economic Zones (SEZs) and Green Industrialization.
     A Workshop on Africa Enterprise Network, catalyzing SMEs and start-ups productivity;
     A Workshop on Youth Entrepreneurship to reduce migration, Youth and women empowerment in enterprise development; and
     A Workshop on Financing Industrialization.
     EIB-UNIDO Africa Day 2018: sustainable Industrialization in Africa.

    Heads of State and Government, high level representatives of international organizations and senior policy makers from across the continent are expected to participate in the AIW2018.

    Media contact:
    Mrs. Esther Azaa Tankou, Head of Information Division, Directorate of Information and Communication, AU Commission, Tel: +251911361185, E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
    Mr. Patient Atcho, Communication Assistant, Department of Trade and Industry, AUC Commission, Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

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    Facebook: https://www.facebook.com/AfricanUnionCommission
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  • ATIGS 2018

    ATIGS 2018

    The Pan African Chamber of Commerce and Industry (PACCI) is very pleased to announce our participation as Supporting Organization of the 2018 edition of the Africa Trade & Investment Global Summit (ATIGS).

    The 2018 edition of Africa Trade & Investment Global Summit (ATIGS) is scheduled to be held on June 24-26, 2018 in Washington D.C. ATIGS is a unique high-level conference and trade show, prestigious, biennial business platform designed specifically to promote and facilitate international trade and foreign direct investment in Africa, with attendance projection of over 2,000 participants from more than 70 countries for a three day of networking, markets knowledge sharing, marketing & matchmaking, B2B, G2B, G2G meetings & deal making.

    The event will see the participation of more than 150 speakers, over 160 exhibitors, high-level government delegations, project developers, business leaders, trade promotional organizations (TPOs) and investment promotion agencies (IPAs) from various African countries, and over 350 global investors including pension funds, sovereign wealth funds, private equity and asset management firms. 

    Unlike most talk-shop conferences focused on Africa, ATIGS moves beyond that instead focus on providing first hand face-to-face access to African markets at a one-stop shop by featuring African countries pavilions inside hall one representative companies sourcing for international partners & investments, and government agencies (TPO’s & IPA’s) showcasing the wide range of trade and investment opportunities that are available in their respective countries to connect with companies worldwide looking to expand or establish their business operations in Africa, and global investors with interests in Africa. There will also be Middle East, Europe, U.S.A, Canada, and Asia exhibition/pavilions representing companies & government agencies with interests to engage with Africa.

    For more information and to register follow the link below.

     http://atigs2018.com/eventbrite/

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