The recognition that the African continent’s infrastructure gap still remains a development challenge has reached consensus among the international development community and African governments alike.
Not only is Africa’s level of endowment low, but the continent also faces higher access costs for all infrastructure services compared with other developing regions around the world.
When all infrastructure subsectors are closely analysed, the energy sector registers the largest deficit. In addition, total road density and access to clean water lag behind other global developing regions.
In the area of information and communications technology (ICT), although great strides have been made over the past 20 years on the continent, the top five African countries in relation to ICT infrastructure and development are only ranked 66th to 109th on a global index.
Based on this very brief overview, it is clear that further concentrated investment for infrastructure development in Africa is required.
Currently, annual infrastructure investment needs in Africa total approximately $93-billion, one-third of which is needed to cover operations and maintenance. With current spending of approximately $45-billion a year, the financial gap is still quite sizable and requires appropriate management to enable the maximisation of the value of local and foreign investments currently being made on the continent.
However, it must be clearly stated that funding the infrastructure gap is not the panacea for the challenges the continent faces.
The core issues are institutional in nature.
Pouring additional funding into sectors characterised by high levels of inefficiency makes little sense. Africa needs to improve the capacity and efficiency of those institutions responsible for developing and managing infrastructure.
The key aim and strategy should not be to reinvent existing institutions but to reform them and support their evolution to ensure maximum efficiency.
While the scale of the challenge varies greatly across African countries, three general strategies could help to foster institutional advancements. These include;
- More efficient spending.
- An enlarged regional approach to infrastructure investment.
- An improved regulatory framework.
When choosing infrastructure projects, simple adherence to a set of criteria will help to achieve efficient spending, by identifying those with the highest returns.
When improving or expanding current infrastructure endowments, investment should make the most of the resources at hand, since any wastage will affect the development of other projects.
Finally, the service providers should ensure that they are charging cost recovery tariffs and utilising cost-saving technologies, in order to provide a reliable and sustainable service.
In addition, the challenging economic geography of Africa requires a regional infrastructure perspective, able to promote cross-country synergies and exploit economies of scale.
This will need a focus on three key areas, which include;
- International transportation corridors to provide maritime access for Africa’s 16 landlocked countries.
- Regional fibre-optic networks to provide access to the internet which will also build the competitiveness of African industries and services
- Strong regional hubs for air and sea transportation to bolster the export potential, trade, and tourism sectors of a large number of countries.
Focusing specifically on ICTs, the region has witnessed dramatic progress in mobile telephony coverage. This needs to be supported by deregulation and reforms to promote intensified competition among service providers. This will reduce end-user prices and extend signal coverage further. To address the low internet penetration rates and high tariffs, reforms should promote private sector investment in fibre-optic backbones and competitive access to submarine cables.
Investment in infrastructure should also be allocated to components that will maximise the positive transformation that the region needs. Sustainable economic growth, as a means of lifting the continent out of poverty, must also be the principal objective of Africa’s infrastructure agenda.
The two main pillars of the infrastructure agenda should be to greater strengthen the foundations for higher productivity in the main economic cities and hubs on the continent and also importantly to ensure a more even distribution of basic living standards.
An infrastructure agenda for Africa has to fully address the challenges of the 21st century by making cities more productive and better places to live as well as integrating rural areas through the spillover of urban growth; as well as linking major population centres across the region.