Closing Africa’s infrastructure gap is a top priority in order to put the continent on a path for double digit growth and sustainable development, according to world- renowned professor of economics Prof Jeffrey Sachs.
“There is no choice. Africa needs 10% per year of economic growth in the next 15 years,” said Sachs. The only way to achieve this was to focus on large-scale investments in trans-national infrastructure projects in power, roads, broadband, and other core regional infrastructure needs.
The professor was speaking the sidelines of the Third Financing for Development Conference in Addis Ababa, Ethiopia, on 13 July. The event had the theme “Unlocking public and private capital for African infrastructure” and was organised by the New Partnership for Africa’s Development (Nepad) Agency and Sustainable Development Solutions Network (SDSN).
The conference ends on 16 July. It is organised under the auspices of the UN’s Financing for Development office.
Thousands of delegates have gathered to set the new financing architecture for a new global partnership. Its outcomes will also address the issue of means of implementation, referring to the “how” the goals set out in the post-2015 development agenda can be achieved.
Support for Nepad goals
Sachs is the director of the SDSN and special adviser to UN secretary-general Ban Ki-moon on the Millennium Development Goals. For Africa to realise the 2030 timeframe, he urged the global community to rally around the Nepad agenda, as the continent’s strategy for implementing cross-border infrastructure projects. “We need to help support Nepad achieve its goals,” he said.
The Nepad Agency has identified Africa’s most important infrastructure needs within the context of the Programme for Infrastructure Development in Africa (Pida), which provides the framework to implement 51 priority programmes and projects in the sectors of energy, transport, broadband and trans-boundary water.
Chief executive of the Nepad Agency Dr Ibrahim Mayaki said Africa’s challenge was not a lack of resources, but a lack of bankable projects. “We need to invest in the capacity to invest.” It was about proposing structured projects, he said.
Mayaki spoke about the complementary instruments that had been developed to build the necessary capacity for early-stage project preparation and the Africa50 Fund to finance the implementation of Pida and other regional infrastructure projects.
He also underscored the important role of regional economic communities in providing the enabling environment for project implementation, through harmonised policies and regulatory frameworks.
Regarding how to crowd in investment, Sachs encouraged African economies to forge partnerships with East Asia, tap into capital markets and strengthen continental bodies such as the Nepad Agency and African Development Bank.
The Nobel laureate for economics and professor at Columbia University, Prof Joseph Stiglitz, noted that financial markets had “failed to translate pools of savings into productive investment”. There was a need to better match these large-scale resources with the financing priorities of developing countries. “The world has the resources with which to do this. Allocating more of these resources to inclusive development would be good for the global economy.”
The best way for Africa to achieve its infrastructure goals was to tap into a Global Infrastructure Investment Platform (Giip), Stiglitz said. The objective of Giip was to put forward an ambitious proposal that would allow long-term investors to ramp up their infrastructure asset holdings, with an allocation target of up to 10% of assets under management over a 15-year horizon.
The Nepad Agency, SDSN, UN Conference on Trade and Development and Washington think tank Brookings Institution agreed to set up a working group that will move Africa’s regional infrastructure financing agenda forward.