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The Infrastructure Consortium for Africa (ICA) announced a 24 per cent leap in infrastructure financing in Africa in 2018, surpassing US$100bn but gaps remain
Launched on 12 November at the Africa Investment Forum, the ICA’s Infrastructure Financing Trends in Africa 2018 report shows that financing of infrastructure in Africa reached a new high of US$100.8bn in 2018, a jump of about a quarter on 2017 and 38 per cent up on the 2015-2017 average.
Mike Salawou, ICA Coordinator, and manager of Infrastructure Partnerships, at the African Development Bank, said, “Over the years the Infrastructure Financing Trends in Africa report has become an important document for presenting, in a consistent manner, how funding is being mobilised to develop the continent’s infrastructure.
“The report’s publication during the Africa Investment Forum is extremely timely. While the increase in financial commitments in 2018 is very welcome, the report also serves to highlight the size of Africa’s infrastructure financing gap – one of the key issues addressed during the forum,” Salawou said.
This years’ report shows the role ICA continues to play in institutional and policy reform as well as its consistent financial contribution within the infrastructure space. This, along with a 65 per cent and 33 per cent increase in commitments over the previous three-year average by China and African Governments respectively, and the role of other multilateral organisations resulted in the 24 per cent increase recorded in infrastructure financing for 2018.
Among the key findings of the report was an increase in financing commitments across all sectors, with a notable increase in the energy sector, which attracted financing commitments worth US$43.8bn, an all-time high and a 67 per cent increase on the 2015-2017 average. The ICT sector also saw record commitments in 2018 of US$7.1bn, mostly from the private sector.
Even with the significant increase in commitments in 2018, there remains a total financing gap of US$52bn to US$92bn per year. Yearly estimates of Africa’s financing requirements range from US$130bn to US$170bn. Water and sanitation has the largest financing gap of all the sectors, based on annual financing needs of US$56-US$66bn and a 2016-2018 average commitment of US$13bn.
Panellists Dr. T. Nyirenda-Jere, Dr. B. Ben Yaghlane, Dr. I. Urua, Mr. C. Kirigua and Mr. P. Guislain, addressed key messages highlighted in this year’s report, which includes, the need to increase both public and private sector financing, strengthen governance and improve the quality of infrastructure services.
The Africa Investment Forum took place from 11 to 13 November in Johannesburg, South Africa, and offered a platform for sourcing funding for bankable African projects, brokering infrastructure deals and providing innovative financial solutions.
The event attracted key global companies, financial players, and public officials who addressed the continent’s critical infrastructure investment gaps.