William Davison Addis Ababa
AFRICAN nations planned to target more private investment in key regional projects to help address a lack of infrastructure that was curbing growth and regional integration, a unit of the African Union said.
Priority projects under the Programme for Infrastructure Development in Africa (Pida), which began in 2012, need $68 billion by 2020 and an additional $300bn for those planned to 2040. Pida had assisted in developing 16 priority trans-national projects so that they were now “bankable”, New Partnership for Africa’s Development (Nepad) chief executive Ibrahim Mayaki said last week.
“Fundamentally we need to attract the private sector,” said Mayaki, a former prime minister of Niger. “They were not interested in Africa 10 years ago, but even if the risk is a bit higher the returns can be much higher than what they’re getting.”
The investment drive seeks to address deficiencies that leave 62 percent of Africans without access to electricity, less than 10 percent able to use the internet and only a quarter of the road network paved.
The result is “expensive infrastructure services, constrained industrial productivity, limited participation in global trade and holding back the competitiveness of production”, according to Nepad, a technical body of the AU leading efforts to improve transport, power and communications.
The union would be encouraged to focus on infrastructure and Pida during Zimbabwe’s one-year chairmanship that began on Friday, President Robert Mugabe said in an acceptance speech.
“We need to continue and perhaps redouble our current collective efforts in this sector,” he said in Addis Ababa. “The road and power projects that we’re developing are a positive step in our quest to improve the African infrastructure.”
The African Development Bank will conduct feasibility studies for the 16 projects African leaders agreed in June. The Abidjan-based lender plans to attract an initial $3bn in equity capital for the programme, using a fund known as Africa50.
Well-prepared African infrastructure deals might be attractive to investors, including US pension funds looking for high returns, Mayaki said.
The top five projects outlined by Nepad are the Ruzizi III hydropower plant between the Democratic Republic of Congo and Rwanda; expansion of the port in Dar es Salaam, Tanzania; construction of the Serenje to Nakonde road in Zambia; a gas pipeline from Nigeria to Algeria; and an upgrade of the railway from Senegal’s capital, Dakar, to Bamako, the capital of Mali.
During its annual summit at its headquarters in Ethiopia last week the African Union signed an accord with China for it to support efforts to improve transport links and industry as part of the organisation’s 50-year strategy to transform Africa by 2063.
“This is a very grand and ambitious project, but it’s also a feasible project,” Zhang Ming, China’s vice-foreign minister, said at the January 27 signing in Addis Ababa.
The deal to improve rail, roads and aviation would enable China to access the resources it needs from Africa over the next decades, said Christie Viljoen, senior economist at NKC Independent Economists in Paarl.
“Any efforts to stimulate regional integration is surely aimed at enabling landlocked countries to export their commodities more easily,” she said in a response to questions on Wednesday. – Bloomberg