The Infrastructure Consortium for Africa (ICA) said infrastructure financing surpassed $100bn for the first time in 2018, but warned that a $92bn financing gap remains.
In its report into infrastructure financing trends in Africa, the ICA found commitments had increased across all sectors. The most notable rise was in the energy sector which attracted $43.8bn, a 67% increase on the 2015-17 average.
The ICT sector also saw a record commitment of $7.1bn in 2018, mostly from the private sector.
However, the ICA said even with the significant increase in commitments in 2018, there remains a total financing gap of up to $92bn per year to meet the $170bn yearly estimate for Africa’s financing requirements.
The water and sanitation sector has the largest financing gap of all the sectors, based on annual financing needs of $56-$66bn against an actual annual average commitment of $13bn.
Mike Salawou, ICA coordinator, said: “Over the years the report has become an important document for presenting, in a consistent manner, how funding is being mobilised to develop the continent’s infrastructure.
“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.”
The report was presented during the Africa Investment Forum in Johannesburg last week.
During the forum, the African Export-Import Bank (Afreximbank) and rail construction firm Thelo DB signed a memorandum of understanding (MOU) to develop, finance and operate railway projects across Africa.
The MOU is part of the realisation that the African Continental Free Trade Agreement will face challenges without the logistical capacity to move goods. The firms will collaborate to modernise the continent’s railways, in turn promoting trade, investment, and economic and skills development.
The projects will help to meet Africa’s “urgent need for efficient and effective transportation and logistics on the continent, particularly in the freight railway sector”, said the two signatories.
Infrastructure projects in Southern, East and West Africa will be focused on to speed up the movement of goods and stimulate intra-Africa trade.
☛ Want to stay up to date with the news? Sign up to our daily bulletin.