While West Africa is seen as the new economic growth zone, Africa as a whole is still facing key challenges impacting on its ability to achieve its true economic potential. A key factor requiring attention is the lack of developed transport infrastructure to meet the growing demand for goods across the continent as a whole, and particularly within individual countries.
Foreign investment in the power, transport and general infrastructure sectors within Africa will help reduce the burden that a lack of facilities is placing on Africa’s economies.
The banking sector can help in terms of narrowing the financial gap by providing finance to the growing list of much-needed upgrades and reforms to the many sectors most notably, power and infrastructure, agriculture and transport.
What remains of the existing rail networks is unprofitable.
For African economies to realise their economic potential, more attention will need to be placed on upgrading existing transport infrastructure and developing new infrastructure. According to the economic research team at Standard Bank Group, a lot of the existing rail networks in sub-Saharan Africa is more than 100 years old and has been impacted on by underinvestment.
The ability of countries to handle bulk commodities is essential if the continent is to be able to boost export revenues by selling commodities internationally. Recently we have seen many African nations issuing bonds, which have become a popular way of funding the various infrastructure projects currently underway.
Global banking institutions have also realised the mutual benefit involved in financing project sectors that will allow for on-going economic growth, which will ultimately impact on the lives of millions across the region.