“While there are short term concerns in some of Africa’s regions, the opportunities abound for infrastructure investment and development,” said the PwC’s Capital Projects & Infrastructure in East Africa, Southern Africa and West Africa report.
The report also said, infrastructure spend in the region is projected to reach 180 billion US dollars per annum by 2025.
According to the report, more than half of the respondents indicated that they planned spending on infrastructure – both new projects and refurbishment of assets – would increase by more than 25 per cent from the previous year.
“They said much of their spending would be focused on new development, with 51 per cent of all respondents planning to spend more than half of their budgets on new assets,” said the report.
PwC said respondents from West Africa were especially bullish, with 58 per cent planning an increase of more than 25 per cent in spending, followed by those in East Africa (53 per cent) and Southern Africa (40 per cent).
Jonathan Cawood, Capital Projects & Infrastructure Leader for PwC Africa, said the shallow economic recovery in most developed markets had shifted the focus to faster-growing regions.
“With an abundance of natural resources and recent mineral, oil and gas discoveries, demographic and political shifts and a more investor-friendly environment, the investor spotlight shines brightly on Africa,” said the group.
Cawood added that there were a number of obstacles that must be dealt with.
“Resolving these obstacles quickly and creatively will not only positively affect their current projects, but more importantly, will attract other project developers, owners and investors to enter the African market.”
According to the report, South Africa remains the powerhouse of the sub-Saharan Africa region with the most sophisticated infrastructure, state-owned entities, financial services, telecommunications, regulation and greater industrial and sector capacity.
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PwC said the overall the top three challenges in delivering capital projects across the region were availability of skills, a lack of internal capacity among state organisations to plan, procure and implement capital infrastructure projects and the impact of political risk and government interference during project lifecycles.
“With a number of concessions having been cancelled by governments in the region, an improvement in transparency, regulation and procurement is needed to help restore the confidence of foreign investors in partnership models,” added Cawood.