Financing future infrastructure across Africa

An ABIQ webinar

A post-pandemic move away from mega-infrastructure projects towards mid-level and sustainable developments could benefit investment in Africa, a webinar enabled by ABIQ was told.

David Baxter, of the World Association of PPP Units, said prestige projects such as sports stadiums, conference centres and museums are being sidelined at a time when people need basic facilities such as healthcare, education and transport.

And the relative costs of African ventures makes them attractive, he added.

“A plan for a one-mile subway in New York would cost US$4bn,” said Baxter. “How far in Africa would that go?”

He opened the session by analysing the state of continental infrastructure. “Where are the Singapore’s of Africa? We need complete feasibility studies to make projects bankable, commercially feasible, economically feasible and financially feasible. Investors are not sentimental.”

Areas of risk are also areas of opportunity for investors, the webinar heard. Transport links may have been shut down during the pandemic but can be made smarter. Healthcare was inadequate for the purpose, but hospitals can be made better equipped to tackle emergencies – while schools have been shut down, future education facilities can be better digitalised.

James Orehmie Monday, CEO of the Africa Infrastructure Fund, said some investment should come from internal sources.

“We have to put some of our own capital on the table,” he said. “If you have 400 million people putting in US$100 a year in the form of bonds, that could be used in projects to attract further international capital. Radical change in how infrastructure is financed is needed. The existing approach is not really working.”

Consultant John Laurent Pyndiah called for a higher percentage of capital expenditure for projects such as housing, pointing out that pandemics require people to stay at home.

He added: “The private and public sector need to work hand-in-hand. After COVID-19 competition for funding will even more fierce – with Africa competing against both Europe and America.”

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To view the event or download the presentation, please visit the event page here.

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