Africa needs US$ 93 billion a year to 2020
By Helen Wright21 May 2013
The African Development Bank (AfDB) said investment of US$ 93 billion a year is needed to 2020 to close Africa’s infrastructure deficit.
“Development Bank funding along will not suffice and financing will remain a major challenge,” the AfDB said, adding that investments in infrastructure across Africa have failed to keep pace with growth and demand.
More than half of the countries in Africa suffer chronic power outages, while the continent’s road and rail networks are inadequate and port facilities insufficient – strains which often add up 75% to the price of Africa’s exports, undermining their competitiveness on the global markets, according to the AfDB.
Meanwhile, inadequate water and sanitation infrastructure costs Africa the equivalent of some 5% of its GDP. Indeed, AfDB said inadequate infrastructure is often cited as the single largest obstacle to doing business on the continent.
The AfDB’s strategy for 2013 to 2022 has infrastructure development at its heart. It said a substantial portion of its future funding commitments will be dedicated to the improvement of transport and logistics chains, increasing energy output, enhancing the development of water resources, and expanding broadband telecommunications.
Further, the Bank will support policy, institutional and regulatory reforms to promote private participation and enhance the efficiency and sustainability of infrastructure investments. Initiatives include promoting public-private partnerships and helping African financial markets build the capacity to raise long-term finance for infrastructure development.
“Africa, it is clear, will need new and innovative sources of finance to clear its infrastructure deficit,” the AfDB said. “The continent’s fragile states will require tailor-made solutions and special tools to address their urgent development challenges.”