When the word infrastructure is mentioned, the name of China comes to the lips of most people. Over the past few years, spending on African infrastructure has risen at a compound annual rate of 17%, to post in excess of 20 billion dollars currently. Most of the infrastructure projects are funded by China, World bank, IMF, foreign governments like those of USA, Britain and a host of other western development partners.
While the growth of investments in infrastructure in Africa has risen significantly, there is still a long way for most African countries to realize the sustainable development goals and each country’s development’s agenda with most being vision 2020 – 2030. Governments (and the private sector) must therefore substantially increase their infrastructure spending for Africa to play in the leagues of developed states like the west.
Since infrastructure investments offer a high impetus to other economic sectors; it is therefore one sector that African governments must prioritize.
Such challenges that, at times, hinder adequate development in infrastructure include economic volatility, political instability, the quality of logistics, health care, political will and access to qualified talent. Currently the average cost of road transport (few African countries have reliable railway transport) are up to four times higher than those in the developed world, complicating the mobility of the African population and significantly cutting on consumer spending. Part reason why the transport costs are prohibitive is the high cost of fuel, (including in countries which produce the most oil like Nigeria); poor road network, insecurity, heavy taxation on fuel (averaging 50%) among others.
Infrastructure investments in Africa should focus on all key areas mobile telephony; electricity generation, distribution and transmission; natural-gas transmission; rail; roads; ports; airports; water and waste water. PeakInsights predicts that investment in African infrastructure can be very profitable, with returns more than twice as high as the rest of the world.
For our clients who wish to invest in infrastructure, PeakInsights offers tools to make such investment profitable. Long term view is required, as well as establishing connections in everywhere you wish to do business. Africa is a huge market with 54 countries, that means different cultures, legislations, laws, different access to resources among other factors.