AU summit discusses infrastructure financing

In a bid to give a further push to development efforts on the continent, African leaders and key stakeholders ended lately a two-day summit in the Senegalese capital, Dakar, under the aegis of the New Partnership for Africa’s Development, NEPAD, agency reports said.

Described as the ‘Dakar Financing Summit,’ DFS, it was aimed at “accelerating the implementation of priority regional infrastructural development projects,” according to a statement from the African Union, AU.

The gathering backed the move from project preparation to the actual implementation of the 16 selected projects from PIDA, the Nigerian Tribune newspaper.

To press home the integration agenda, African Union Commission Chair, Dr. Nkosazana Dlamini Zuma, called for more domestic resource mobilisation and increased private-sector support for the 16 identified projects in transport, rail, ports, energy, and ICT showcased in Dakar as being key to leveraging regional integration.

According to statistics, Africa’s infrastructure lags behind the rest of the developing world, and the gap has been growing. Some 30 African countries face a crisis in power supply.

The region needs to double installed capacity within a decade to keep pace with demand.

In a region with limited participation in global trade, road freight traffic is extremely slow in certain countries, while major ports lack capacity and are congested.

On the other hand, Africa’s infrastructure services are several times more expensive than elsewhere in the developing world.

The high cost of infrastructure services makes these unaffordable for large segments of the population, and holds back the competitiveness of production.

Meanwhile, finance for African infrastructure remains inadequate. Much of the annual funding gap of 40 billion US Dollars (about FCFA 19,380 billion) to 45 billion US Dollars (about FCFA 21,803), is associated with the power sector.

While there are significant prospects of increasing private finance in some areas, notably in telecommunications, a substantial share of investments needs are in sectors such as water supply, power transmission, rural roads or in ‘fragile States’ that are unlikely candidates for private finance.