“We all know that one of the biggest problems for Africa’s growth development, both socially and economically, is infrastructure deficits,” Solomon Asamoah, Deputy CEO and Chief Investment Officer of the Africa Finance Corporation told CNBC Africa.
The Africa Finance Corporation summit which was held in Lagos, Nigeria attracted over 500 leading thinkers from different sectors of the economy. The gathering focused on the opportunities and challenges of the African infrastructure landscape. Experts believe that infrastructure has the potential to add an estimated average of 2 per cent to Africa’s economic growth rate over the next decade.
(READ MORE: Intra-Africa trade still hampered by infrastructure deficit)
According to the Africa Infrastructure Country Diagnostics, the continent’s infrastructure spending needs to stand at about 93 billion dollars per year and about 40 per cent of the total spending needs are associated with power.
“We focus on three main areas; the power sector, transportation infrastructure sector and also natural resources. All the areas where Africa has deficits but also has great potential to leap forward and be very strong,” he said.
The corporation is the lead investor in Cenpower Generation Company Limited which is implementing the Kpone Independent Power project, a 340 megawatt combined cycle gas turbine power plant in Tema, Ghana.
“We touched on the issues that need to happen to unlock infrastructure financing from the private sector. The role that governments need to play, the role the private sectors need to play and the circumstances which private sector needs to see before they invest in infrastructure in Africa,” he added.
The Nigerian government has started making active strides to build the infrastructure gap through its 30-year integrated infrastructure plan aimed at raising the country’s stock of infrastructure from the current 35 per cent of GDP to 70 per cent by 2043.
(WATCH VIDEO: Efforts needed to lift Nigeria’s infrastructure level)
However, according to Asamoah, before the corporation invests in any businesses, they have to first be profitable and sustainable but most of all also impact the environment positively.
“There’s no point putting in money and losing money because you will never be able to do repeat investments so they have to be profitable. Secondly, they have to make an impact. They need to impact the environment in which we operate. We are a financing institution as well as a commercially minded institution so we have to have those two things in place,” he explained.