Africa’s expensive infrastructure make-over - CNBC Africa

Africa’s expensive infrastructure make-over

Western Africa

by Thabile Manala 0

Africa’s infrastructure spend is set to rise as report reveals, as 30 per cent of the infrastructure is in ruins. PHOTO: Focus Africa

Africa’s infrastructure spend is set to rise as a report reveals that 30 per cent of the infrastructure is dilapidated.

According to a recent PricewaterhouseCoopers (PWC) report, it indicated that East, Southern and West Africa could be spending up to $180 billion on infrastructure by 2025.

The report highlights that at least 60 to 70 per cent of that amount is owed to infrastructure in South Africa and Nigeria. The West African country was leading due to the fundamentals of the oil price and naira shifts being stable despite being presently supressed.

Head of capital projects and infrastructure at PwC, Jonathan Cawood, said that infrastructure outlook will be increasing by 10 per cent per annum.

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Cawood told CNBC Africa there is a “great sense of enthusiasm, commitment and willingness to engage in new ideas” from government developers, funders and operators of infrastructure.

The strong relationship between China and African economies could see the Asian country being a key player in terms of funding, knowhow and labour. Although Cawood notes that localisation and local participation should be a priority moving forward.

Capital innovation for infrastructure requires clarity of regulatory frameworks, so that investors feel “more secure” of their long-term nature.

Shortage of funding came out as the main issue in the PwC survey, however Cawood said after unpacking it, there was actually “a tremendous amount of funding available”.

“It’s really about better project preparation and feasible projects that are part of a bigger longer term master plan.”

On the issue of budget overspending for capital projects, he assured that it is not a dilemma unique only to Africa.

“Capital projects across the globe, in fact many of them coming in late, over-budget and not delivering the promised outputs.”

Public-Private Partnerships in Africa have an opportunity to grow if the private sector can have an open window of continual opportunities and have government be an equal player.

“Sometimes government does have to put in the catalytic infrastructure, those first pieces of infrastructure that create the building blocks of a project,” said Cawood.

He emphasised that there are risks that can be better carried by government. By allocating all the risks to the private sector pushes prices up and discourages funding. 

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