The development and growth of any modern economy is inextricably linked to the state of its infrastructure. Well-developed infrastructure is usually a catalyst for industrialisation, capacity building, economic growth and better standards of living.
The unfortunate fact is that sub-Saharan Africa has lagged far behind other developing regions in terms of infrastructure development.
The World Bank and multilateral intuitions produced a comprehensive regional analysis on the ‘infrastructure gap’ which they figured would require investment of $93bn per annum – equivalent to 8% of its GDP – for both new infrastructure and maintenance and refurbishment, if the continent was to meet its growth targets.
Africa’s infrastructure deficit presents a major obstacle to the continent’s long term development. The lack of reliable infrastructure continues to hinder socio- economic progress on the continent – one result of which is that the strong economic growth witnessed on the African continent over the last few years has not translated into improved socio- economic development.
The World Bank has worked out that Africa’s generally dilapidated infrastructure (electricity, water, roads and ICT) knocks 2% off the regional economic growth rate per year and cuts business productivity by as much as 40%. The Infrastructure Consortium of Africa estimates that poor road, rail and harbour infrastructure adds 30-40% on goods traded among African countries.
Therefore infrastructure development is the sine qua non in terms of the continent’s economic growth – which is also inked to social and political stability. Infrastructure, the foundation of prosperity - African Business
Among the first to rise to the challenge of filling the infrastructure gap was the Africa Finance Corporation (AFC). It was way ahead of the race when it was set up in 2007 as a unique pan-African PPP institution dedicated to infrastructure investment with the Nigerian Central Bank, Institutional investors and private individuals as shareholders. It was launched with an equity capital base of $1.1bn.
Today the AFC is an international, multilateral investment grade corporation with a membership of 14 African sovereign states. It has invested over $4bn on projects covering 26 African countries; its current balance sheet has grown to $3.2bn; it has emerged as one of the highest investment-grade rated multilateral financial institution in Africa and it is setting regional benchmarks in its complementary service areas – project development, financial advisory and principal investing. And it is delivering healthy returns to its shareholders.
The Corporation has focussed on the major pillars of infrastructure: power, natural resources, transport, heavy industry and telecommunications; as well as on ‘soft infrastructure’ such as capacity building. AFC Projects
The AFC’s proactive approach has raised the game in terms of infrastructure investment and project management. It has formed international alliances and partnerships with development agencies and the private sector. For example, its latest partnership is a MOU with Moroccan bank Banque Centrale Populaire (BCP) to increase collaboration on financing vital infrastructure projects in North and Sub-Saharan Africa.
Andrew Alli, President and CEO of AFC said: "Partnerships such as these open up Africa's infrastructure opportunity to more international investors and the sharing of expertise will contribute to devising innovative financing solutions for the infrastructure projects that will drive Africa's economic growth in the future."Infrastructure, the foundation of prosperity - African Business
The AFC has also taken the initiative, together with development partners, to launch the Africa Infrastructure Development Association to act as the voice of the private sector project developer community. This underlines the importance of global collaboration to deliver successful financing and project development solutions for infrastructure projects across the continent.
The Corporation’s AFC Live 2017: Connect, Engage, Innovate – the Infrastructure Revolution summit in Abuja, Nigeria in May 2017, will advance and deepen this momentum through its theme: Building Tomorrow’s Africa Today. Infrastructure, the foundation of prosperity - African Business
For more information on how to attend the event, please click here