Africa's Infrastructure Deficit; The Diagnosis

In Monetory/Budgetary Terms

Agence Francaise de Developpement and World Bank summed up Africa’s Infrastructure deficit in a 2010 Publication called Africa’s Infrastructure – A time for Transformation, where they looked at the challenges faced by those intending to finance Africa’s Infrastructure. The publication’s resounding numbers indicated then that Africa needed to spend $93 Billion annually in order to finance her Infrastructure needs and catch up with the Rest of the world. These numbers have since been revised by the Africa Development Bank (AfDB) in their 2018 economic outlook for Africa, which now puts the continental Infrastructure needs at an Annual spending requirement of $130-$170 Billion. Even though most studies tend to focus their diagnosis on the monetary deficit, it has come to light that Africa does not necessarily need to solve her financial woes in order for her to develop her Infrastructure. The AfDB believes that Africa can achieve a lot of economic growth by developing Targeted Infrastructure to support competitive Industries, or industries that give individual countries comparative advantages over others. Put in other terms, the AfDB encourages African Economies to look at Infrastructure as an input into production and function of other sectors of the economy, and to put more focus on developing “enabling infrastructure’’.

 A trend has emerged which signals that the numbers alluded to above might increase again. Deloitte’s Infrastructure Trends Report of 2016 recorded a decline in Infrastructure Funding across the crucial forms of Infrastructure; Energy and Power, Transportation and Water and Sanitation. This was also reiterated by Infrastructure Consortium for Africa (ICA)’s Africa Infrastructure Funding Trends report of 2016 which indicated a general decline in commitment of up to $62.5 Billion.

Source: Africa’s Infrastructure Funding trends - ICA

How Bad is Bad?

The reality of the gap in infrastructure development is harrowing, here is what the World Bank reported; In 2014, the share of population in Africa with access to electricity was estimated 47 percent, of which 72 percent was in urban areas and 33% in rural areas. This power comes at a very high cost; the average effective cost of electricity to manufacturing enterprises in Africa is close to $0.20 per kWh, around four times higher than industrial rates elsewhere in the world. Access to improved sanitation was 36 percent in 2015, and access to basic drinking water sources was at 63%. Road freight tariffs in Africa are two to four times higher per kilometer than those in the United States, and travel times along key export corridors two to three times higher than those in Asia. Mobile and internet telephone charges in Africa are about four times higher than those in South Asia, and international call prices are more than twice as high. In Africa 1GB of data costs an average citizen nearly 18 percent of average income in 2016, against only 3 percent in Asia. Although roads are the predominant mode of transport, much of Africa’s road network is unpaved, isolating people from basic education, health services, transport corridors, trade hubs, and economic opportunities. Road safety is worrisome, with the region recording the highest rate of fatalities from road traffic injuries worldwide, at 26.6 per 100,000 population for 2013.

 Doomsday?

 One may look at all of these factors and give up hope. A report indicates however, that the famous Law of Diminishing Returns applies also in Infrastructure, with Africa being the most favoured by this concept because she still has a lot of developing to do. The opportunities in the development of the built environment in Africa are seemingly endless, because wherever a gap exists, an opportunity to fill the gap exists as well.

The causes of most of the problems that affect the growth of Infrastructure Development form later parts of this discussion, with subsequent suggested solutions and an expanded discussion on opportunities. I sense that this is going to be a long week, but hopefully a fruitful one. I have to indicate again that the numbers presented herein were not generated by myself, I have tried by all means to mention sources of such numbers, and wherever I might have failed to do so, kindly inform me so that I correct such a mistake.