- Nigerian finance minister says country needs to tap its non-oil revenues
- Ivory Coast slashes budget on low cocoa prices, President Says
- Nigeria's Buhari Suspends Top Aides Over Graft Allegations
- Economic Growth in Sub-Saharan Africa Rebounds to a Projected 2.6% in 2017
- Kenyan Economy Expands at Fastest Pace in Five Years in 2016
LAGOS, Nigeria, Capital Markets in Africa: Welcome to the August edition of INTO AFRICA, a publication with fresh insight into Africa’s emerging capital markets. The edition focuses on Infrastructure Financing in Africa. Please download by clicking INTO AFRICA PUBLICATION: AUGUST EDITION.
Africa has experienced rapid and exponential economic growth in the last decade and a half. This growth has occurred despite the continent’s huge infrastructure deficit, one of the reasons why economists and policy commentators question Africa’s economic growth fundamentals. They argue that economic growth should bring about improvements in living standard (such as improved health care, shelter etc.) as greater economic stability and increasing levels of disposable income lead to a greater demand for goods and services.
The key constraint to economic growth in Africa is the lack of adequate infrastructure. A World Bank study revealed that the annual financial requirement for infrastructure in Sub-Saharan Africa is about US$93 billion a year. Efforts are being made to finance this, however, only US$45 billion is being mobilized, two thirds paid for by African governments and citizens, 8% by multilateral and bilateral donors and the rest by the private sector in emerging economies. There is, therefore, an estimated funding gap of US$50 billion a year. This makes the need to concentrate efforts in addressing the infrastructure deficit one of the major public policy tasks of African governments today.
Clearly, public funding is a much needed resource but its availability is limited. The clamour for private investment to support infrastructure financing has gotten louder, however, to attract more private funds towards infrastructure financing, African countries will have to create a more conducive business environment for investors, Innovators, and Entrepreneurs by enabling Engineering and Construction Firms to overcome obstacles such as unpredictable regulations, bureaucratic delays and struggles to secure land rights and encouraging impactful financing models.