Leaders and experts from various sectors and regions shared their insights and experiences about the role of transport infrastructure in transforming the continent at the Africa Investment Forum (AIF), an annual business gathering that aims to raise funding for infrastructure and other projects in Africa.
Participants gave examples of how transport infrastructure, such as roads, railways, ports and airports, can foster trade, integration, and growth in Africa. They generally agreed that Africa still has a huge infrastructure gap that hinders its development, stressing the need to increase infrastructure financing through innovative solutions such as those promoted at the AIF.
Participants heard that African countries have a dual challenge in developing their transport infrastructure: they must ensure efficient, safe, and affordable mobility for all, while reducing the environmental impact of that infrastructure. This is a complex and urgent challenge that requires innovative ways of managing risks and attracting capital, particularly from the more risk-averse private sector.
Dr. Akinwumi Adesina, President of the African Development Bank (AfDB), noted that AIF brings together world-class financiers that have the ability to use innovative financing instruments and mechanisms – such as pooled financing facilities, blended finance, and guarantees – to lower risks and increase returns. He called for significant investments to build better roads, bridges and ports, noting that the AfDB was leading the way in championing big ticket investments in transport infrastructure across the continent. “As of 2022, the African Development Bank had financed 25 transport corridors, constructed over 18,000 kilometres of roads, 27 border posts, and 16 bridges, for a total amount of $13.5bn,” he said at the AIF opening ceremony.
Adesina shared some examples of transformative regional corridors. These included the Kazungula Bridge connecting Botswana and Zambia; the Maputo Corridor linking Mozambique to South Africa; and the Abidjan-Lagos Corridor connecting five West African countries.
He also discussed a new plan to connect Angola, Zambia and the Democratic Republic of the Congo, making it easier for them to trade. The AfDB has earmarked $500m for the project.
Five key steps for transport corridors
According to Adesina, regional transport corridors in Africa can have a greater impact if five key steps are followed. Firstly, the continent will need to pool financial resources for corridor projects, highlighting the need for innovative financial engineering.
Secondly, countries will need to create special industrial zones along corridors to take advantage of existing infrastructure. Third, the continent must adopt a systematic approach and platform for identifying and collaborating on strategic regional corridors.
Fourth, countries need to implement one-stop border posts along corridors to facilitate trade and reduce travel times. Finally, Africa will need to leverage concessional financing, such as the African Development Fund, which provides invaluable resources for low-income countries to invest in regional corridors and crowd in incremental capital.
A dramatic increase in urban population
Delegates heard that the rapid pace of urbanisation in Africa poses a significant challenge for the development of sustainable transport infrastructure on the continent. According to UN projections, Africa will have the largest urban population in the world by 2050, with more than 1.2bn people living in cities. This is a dramatic increase from the current number of about 600m.
While substantial progress has been made in improving urban infrastructure and services, many African cities have struggled to cope with rapid population growth and provide adequate infrastructure and services.
This calls for urgent action and increased investment in infrastructure, in line with the AIF’s mission to advance projects to bankable stages, to raise capital and to accelerate deals to financial closure, with a focus on critical sectors such as transport infrastructure.
This post first appeared on African Business
