Rethinking ways to plug Africa’s infrastructure deficit

The Africa Finance Corporation's ecosystem investment model focuses on value accretive beneficiation and import substitution. Samaila Zubairu, President and CEO of the Africa Finance Corporation, emphasized the importance of ensuring that Africa captures and retains value from its vast critical resources. In a recent interview with CNBC Africa, Zubairu discussed the need for Africa to rethink its approach to infrastructure funding and industrial development. With a projected requirement of $150 billion annually for infrastructure investment, Zubairu outlined the critical steps needed to stimulate industrial growth and economic transformation on the continent. Zubairu highlighted the importance of transitioning from exporting raw materials to promoting value addition and retaining value locally. He emphasized that Africa possesses significant resources such as cocoa, bauxite, platinum, copper, cobalt, and more, but lacks processing capacity, leading to the loss of associated jobs and economic benefits. By focusing on value addition within the continent, Zubairu believes Africa can address fiscal challenges, currency depreciation, and high debt levels. One of the key strategies Zubairu proposed is leveraging the African Continental Free Trade Agreement to promote intra-African trade in locally produced goods. With the global shift towards electric mobility, Africa's abundance of resources like copper, cobalt, nickel, graphite, and lithium presents an opportunity for industrialization. By moving from raw material exports to battery precursors and ultimately cell and vehicle production, Africa can tap into a $7 trillion market and position itself as a key player in the electric vehicle industry. Furthermore, Zubairu shared success stories from projects like the Gabon Special Economic Zone, where the Africa Finance Corporation facilitated the transformation of timber processing, leading to job creation and value addition. Similar initiatives in countries like Benin Republic, Togo, Chad, Nigeria, Cote d'Ivoire, and the Democratic Republic of Congo are underway to promote industrial activities along various value chains. The key to the Africa Finance Corporation's success lies in its pragmatic approach to de-risking investments, forming strategic partnerships, and creating Special Economic Zones to provide a conducive environment for industrial development. By focusing on mitigating risks, collaborating with stakeholders, and fostering a pro-development mindset, Zubairu believes that Africa can overcome obstacles to economic progress and achieve sustainable industrial growth. In conclusion, unlocking Africa's industrial potential requires a paradigm shift towards value addition, intra-African trade, and strategic partnerships. By embracing sustainable practices, promoting industrial diversification, and prioritizing local value creation, Africa can chart a course towards economic transformation and prosperity. As Zubairu aptly stated, 'We have a mindset that Africa is our jurisdiction, and we have to make it work.'