The financing of cross-border infrastructure projects is a key driver for progress and acceleration of Africa’s regional integration.
Ibrahim Assane Mayaki, Chief Executive Officer of the African Union Development Agency (AUDA-NEPAD) thinks that a stronger public-private partnership could hasten the investment in these regional projects.
Mayaki was speaking at the Continental Business Network (CBN) Media breakfast, organised in the sidelines of PIDA week in Cairo. PIDA stands for the Programme for Infrastructure Development in Africa (PIDA)
Examples of regional projects include two hydropower projects in East and West Africa (Rusizi III and Sambangalou Dam respectively) and the Nigeria-Algeria Gas Pipeline project that is at an advanced stage of financial close.
“more than 60 per cent of infrastructure projects in Africa are funded publicly” explained Mayaki, adding that the know-how that was built-in financing national projects can be leveraged to finance regional projects.
Mayaki argued that that CBN is a platform which could look at challenges and obstacles to financing regional projects on the continent. The CBN aims to “crowd- in” financing and support for infrastructure projects by creating a platform for collaboration between the public and private sectors.
UN Economic Commission for Africa studies show that infrastructure development in Africa can potentially raise GDP by 2 per cent and develop the backbone for rapid industrialization, boosting the capacity to generate more domestic resources.
Speaking at that CBN media breakfast, Robert Lisinge, Chief of Energy, Infrastructure and Services Section at the ECA recalled the importance to harmonize policies, laws and regulations which pertain to infrastructure investment.
“When we are talking about regional projects, one of the challenges is to have a standardized environment for investment in infrastructure across countries”, he noted.
Lisinge highlighted the need for a better understanding of the perceived risks related to transboundary infrastructure investments as well as the development of a common framework to harmonize the laws, policies and regulations to facilitate their implementation. This explains why ECA developed the model PIDA Law which is now being domesticated in African countries.
He also noted that ECA has recently created a division of private sector development and finance to enable private and public entities to access high-quality technical advisory services.
The Programme for Infrastructure Development (PIDA) provides the strategic framework for priority projects to transform Africa through the construction of modern infrastructure into an interconnected and integrated continent.
The Africa Union’s Agenda 2063 anticipates that “world-class integrative infrastructure” will propel Intra African trade to 50 per cent by 2045 and Africa’s share of global trade from 2 per cent to 12 per cent.