Poor infrastructure in sub-Saharan Africa cuts national economic growth by two percentage points every year and reduces productivity by as much as 40%. While the continent has made great strides in developing infrastructure, new opportunities need to be explored, and developed to accelerate the economic expansion of Africa’s countries.
This is where the African Infrastructure Business Forum comes in. The forum is the biggest regional event and think-tank dedicated to the topic of infrastructure, and focused on regional integration of infrastructure projects and opportunities. The sixth annual African Infrastructure Business Forum will be attended by key government officials, leading infrastructure experts and business professionals from across the continent. Participants will collaborate and discuss ways to advance infrastructure, notwithstanding the current South African or African socioeconomic and political challenges.
The International Monetary Fund on a recent visit to the country in June cautioned that the South African economy remains exceedingly susceptible to external shocks and funding shortfalls. The IMF also emphasised that current political and domestic factors could exacerbate the situation, “…especially if accompanied by further downgrades of local currency sovereign credit ratings to below investment grade…” According to the IMF, political uncertainty and instability would affect investor and business confidence. Investors are concerned that government policy to promote socioeconomic development and revive economic growth would be neglected, due to the divisive atmosphere that currently permeates the ruling African National Congress (ANC), in the motivation to replace President Jacob Zuma.
The main impetus of Infrastructure Africa is to provide solutions for Africa’s socioeconomic challenges. Transboundary infrastructure projects are integral to regional integration. Developing these infrastructure projects are crucial for ensuring that all modes of transport link countries physically, politically and economically, and provide continued global market access.
The event includes a two-day conference and showcase exhibition, and has the highest level of African and South African endorsement for an infrastructure event on the continent. The event provides the business platform for private and public sector players seeking to meet African infrastructure project owners.
The importance of hosting such an important conference cannot be overemphasised as it provides a unique interactive space for companies to focus on the continent’s growth hotspots, discuss infrastructure trends, meet project developers and relevant government authorities, while exploring infrastructure potential and business opportunities.
African Infrastructure acknowledges that an increasingly volatile global context is forcing Africans to look inward in order to find African solutions to African problems. In 2050, Africa will make up one-fourth of the world’s population, the world’s youngest region where the average age of the population is under 25 years old. Therefore, it behoves governments across the continent to create infrastructure that will enable youth development, support industries, provide employment opportunities and job creation for future generations. An efficient and competitive transport system ensures an integrated infrastructure network that will promote safe and secure transport sectors, enable social and economic development, improve rural access, infrastructure and mobility.
Transport infrastructure is often linked to other regional infrastructure projects in energy, communications, water and sanitation. Hence, productive economic development is needed to ensure strong infrastructure networks that connect cities and countries, thereby forming the backbone of transport systems.
Africa needs to mobilise financial resources including long term income generation plans. These will ultimately create revenue sustainability for infrastructure projects, and concomitantly African entrepreneurs need the support, political will and accountability of governments across the continent.
Infrastructure Africa will also highlight the necessity for assessing the bankability of a project which entails a stable and visible cash flow throughout the entire financing of a project. In order to be a global player, Africa needs to advance its own innovation and development, as well as utilise the technological advancements of other countries. Though, in the main, the last 10 years have seen African governments finalising infrastructure projects, primarily in transformational technologies.
African Infrastructure will be addressing the de-risking of transboundary infrastructure projects whereby infrastructure investments require long-term policy planning, with strategic policy frameworks that exceed political cycles. The projects require broad political consensus and must be able to withstand the political implications of the next election. This is particularly true for projects that take place across and between national borders. Coordinating the priority-setting of regional projects have been especially difficult, given the significant differences across countries and sectors in governance and regulatory environments. The varying levels of private-sector involvement, the intensity of economic activity, the conditions of peace and stability, as well as the demand for, and acceptance of, these projects all have a significant impact on the final outcome of these ventures.
South Sudan has become an emerging market whereby its infrastructure at all levels needs restructuring. While there has been a significant amount of transformation since the signing of the Comprehensive Peace Agreement in 2005, potential investors and other stakeholders need to still bide their time until the infrastructure and necessary systems are fully installed.
China has become the prime financier of Africa’s infrastructure projects. This is a concern amongst various stakeholders including non-governmental organisations, international financial institutions and Western governments regarding debt creation, good governance and environmental protection. However notwithstanding, Africa’s potential for development is vast, and therefore valued trade partnerships, with key investors such as those emerging from China, will be explored.
Finally, Infrastructure Africa will play an essential and fundamental role in articulating and unlocking the potential business development within infrastructure development across the continent as a whole.
The sixth annual Infrastructure Africa Business Forum will be held at the Sandton Convention Centre on August 21 and 22.
Liz Hart is managing director of Siyenza management.