It’s an inescapable fact that modern infrastructure is vital to economic growth. In Africa, energy, internet and transport costs are among the highest in the world, yet many officials still plan ambitious infrastructure upgrades despite their limited public budgets.
Fortunately, private investors, both from on the continent and oversees, are attracted to infrastructure development in Africa’s growing markets - many willing to use their own capital to address the more than USD90 billion annual infrastructure spending gap.
As a facilitator of infrastructure development and investment throughout the continent, our experience tells us that 2017 should see a continuation of international and intra-continental collaboration aimed at achieving prosperity for all and, most importantly, moving Africa forward.
Some countries most favoured for investment, according to experts, include:
Senegal: One of the most stable economies in Africa, Senegal is already working on replacing the aging, congested Port of Dakar in Bargny with a newer, more modern version. This major upgrade should enhance the country’s growth. Further expansion in the power sector could also fuel Senegal’s growth narrative. Today, the cost of power is high with more than 50% of the energy coming from biomass. Recent oil and gas discoveries (Kosmos Energy’s major offshore gas discovery, for example) present great opportunities for gas-to-power plants.
Cote d’Ivoire This West African country is on a winning streak; its economy expected to grow between eight and nine percent between 2017 and 2018. President Alassane Ouattara and Budget Minister Abdourahmane Cissé agree that strengthening infrastructure will drive the next phase in Cote d’Ivoire’s development. To this end, the government plans to spend USD60 billion on infrastructure through 2020, with the private sector providing almost 70% of that funding. Expansion in Cote d’Ivoire’s flourishing power sector is set to continue as well, mostly due to independent power producers, or IPPs.
Cameroon Like many emerging African economies, Cameroon is experiencing severe power problems that have often lead to load shedding in main urban areas. Subsequently, this has negatively affected the country’s growth, but President Paul Biya has promised to “bridge the energy gap and end load shedding” with numerous energy projects. Experts caution, however, that the country’s ambitious industrialisation project will need more new power builds and upgrades to transport networks.
Uganda and Tanzania Though these East African nations offer lucrative opportunities in the power sector, they also present political challenges: Uganda has diverted its oil pipeline through Tanzania rather than Kenya partly due to, many believe, the influence of terrorist group Al-Shabaab, raising the cost of this project for a country already facing budget restraints. Meanwhile, Tanzania is implementing austerity measures, which will negatively impact infrastructure investment.
Yet, both governments require private investment to address power constraints, and both have access to oil and gas. Furthermore, both need investment in pipelines, roads and airports to support future growth.