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intelligence


INFRASTRUCTURE BUILDING

MANY AFRICAN COUNTRIES HAVE MADE EFFORTS TO PROVIDE A MODERN INSTITUTIONAL FRAMEWORK FOR PUBLIC PRIVATE PARTNERSHIPS (PPP) IN INFRASTRUCTURE. THE GREATEST PROGRESS IS REFLECTED IN ICT, BUT PRIVATE INVESTORS HAVE ALSO INVESTED US$2.5 BILLION IN 34 INDEPENDENT POWER PROJECTS – GENERATING 3,000 MW OF NEW CAPACITY IN RECENT YEARS

In transport, the World Bank reported a total investment of US$1.8 billion. The region spends about US$45 billion every year on basic infrastructure. The main sources of funding are public budgets, resource rents, local capital markets, private sector and non-OECD financiers (China, India and Arab Gulf states), as well as traditional donor assistance. The latter includes development finance institutions (DFIs), namely the World Bank, African Development Bank and European Investment Bank. Roughly onefifth of bilateral and multilateral support is dedicated to infrastructure building.

According to Pierre Yourougou, an African business specialist, the participation of these DFIs is viewed by other co-financiers as a guarantee and facilitates the mobilisation of funding from international capital markets. The safest route for UK engineering, procurement and construction firms is to participate in projects funded by official development assistance (ODA) – with guaranteed payments. External aid to sub-Saharan Africa infrastructure doubled from US$4.1 billion in 2004 to US$8.1 billion in 2007.

Africa needs reliable infrastructure to connect capitals, ports, border crossings and secondary cities. UK firms can provide advanced technologies and finance. Carolyne Akers, head of the UK Trade & Investment Africa team, says: “We have experienced staff with in-depth knowledge across 14 countries in Africa. They can help UK businesses to capitalise on these growing opportunities and advise on how to negotiate what can be challenging routes to these markets.”