The numbers are looking good. Investment by value of mega-projects under construction grew by 46.2% in 2014, and Africa is expected to host nearly a quarter of the global urban population by 2050 – proof that the continent continues to present foreign investors and development companies with many inviting opportunities.
However, converting these into sustainable solutions that meet Africa’s needs will require a different philosophy and a new long-term approach from many players, according to Darryll Castle, chief executive of PPC.
He was speaking at a Gordon Institute of Business Science Forum event. In order to deliver on the continent’s vision of “sustainable success”, companies cannot simply adopt a “final frontier” philosophy and expand into the continent accordingly. They have to take both a macro and micro view – redefining return on investment such that it affects all stakeholder communities positively, he said.
As rising income and increasing levels of urbanisation continue to support economic growth across large portions of Africa, construction companies in emerging markets look set to grow well into the medium term.
“Investment by value of mega-projects under construction alone tripled from $103 billion (about R1.6 billion) to $326 billion in 2014 [according to Deloitte’s African Construction Trends Report 2014],” noted Castle.
“The latest Mo Ibrahim Foundation Report additionally forecasts that the next 35 years will see the continent accommodate 900 million new urban dwellers. Both of these paint an enticing picture for foreign investors, developers and construction firms – one which many have already started gearing to respond to.”
Expanding into Africa brings its own unique set of opportunities and challenges. It also moves continental “newcomers” into a development space – where a business as usual approach cannot meet non-negotiable growth and sustainability imperatives.
“Dumping building products cheaply, extracting resources without local beneficiation or any other form of business that is purely profit-oriented cannot be construed as ‘good for Africa’, especially against the back of the continent’s critical needs: reducing the cost of energy and mobility, job creation for youth and women as a priority, and growing manufacturing capabilities and intra-Africa trade, among others,” said Castle.
“As such, a far more long-term and legacy view of return on investment has to be taken – with the starting point for this exercise being to map out an inclusive list of project stakeholders.”
Government and local investors usually fall comfortably into the stakeholder category, but Castle said that many African-expansion exercises often excluded local communities and employees as key shareholders in the business.
“This typically manifests through imported labour [which does not unionise] and a lack of local succession planning – where the more ‘valuable’ skilled jobs remain reserved for foreign nationals ostensibly because the skills are not locally available. This effectively erodes and inhibits progress and development, exacerbating the cycles of poverty and economic exclusion that many local communities already find themselves in.”
He added that the alternative – an inclusive and participatory form of partnership – can, however, have the complete opposite effect.
“This is something we’ve seen ourselves through PPC’s expansion into Rwanda at our Cimerwa facility [in Bugarama in south-western Rwanda]. In this instance, we set a greater context for the partnership – notably that of ‘sustainable modernisation’.”
This enabled committed collaboration between all stakeholders: PPC and the Rwandan government, the Bank of Kigali, KCB Bank of Rwanda, the Eastern and Southern African Trade Development Bank, the local community, and up and downstream partners (including logistics providers) in the greater value chain.
“By setting critical milestones together and taking a purpose-driven approach, we have been able to roll the project out in a way that ultimately speaks to our collective legacy objectives,” said Castle.
These include extending Cimerwa’s production capacity from its previous 100 000 tons a year to 600 000 tons to meet the capacity needs of the Rwandan market and greater region, and implementing an extensive skills transfer programme that will ensure that over 95% of the total workforce employed at the new facility will ultimately be local.
“Investing in Africa requires ‘building’ Africa,” said Castle.
“To truly ‘build’ Africa, companies have to move beyond simply growing their asset base to creating meaningful capacity around them that will ensure communities remain self-sufficient well into the future. This is critical if we’re to realise the continent’s economic potential and uplift local communities so as to stimulate greater collaboration, growth and sustainable development for all of Africa’s peoples,” he concluded.
THE provision of water to entire citizens of the continent is a formidable task that can nonetheless be fulfilled.
This has the prevailing sentiment at the seventh Africities Summit ongoing in Johannesburg.
Chris Heymans, Senior Water and Sanitation Specialist at the World Bank, based in Nairobi, Kenya said although major challenges existed, World Bank research presently being undertaken found there were spots of encouragement on the continent.
It was these examples that could provide the impetus for effectively tackling water and sanitation problems across the continent by providing tangible examples of success to other local authorities and utilities.
The ideal delivery system for water was piping of the commodity into homes of users, said Heymans.
This had a profound impact on the quality of life of individuals, but -because of rapid urbanisation in Africa’s cities – this ideal was being hampered by growing slum settlements on the outskirts of cities where people still had to move long distances to find water.
Across the continent, the needs of settled, ‘richer’ communities and those of poorer consumers were tackled in various ways. Some authorities restricted themselves to piped delivery to more affluent areas, whilst other cities argued for not providing water at household levels.
“Whatever the arguments for and against, the fact was that it was the poor who suffered as they had to pay more for water than more privileged consumers. They also relied on ‘water merchants’ to supply what could be water of a poor standard. The impact on quality of life and health were obvious,” Heymans said.
He cited an example of Ouagadougou, capital of Burkina Faso, where a working compromise had been established and was working for the benefit of all parties.
Although city inhabitants received piped water, the city authorities had taken the decision to extend their water network by running pipes to the outskirts of areas dominated by informal settlements outside the city limits.
“Here, people who had been selling water, had been recruited as partners and were engaged in running the pipe network further into these areas and selling access to water piped closer to peoples’ homes,” Heymans said.
To ensure that these services could be supplied at a reasonable rate to the people, the delivery of water to the outskirts of these areas was subsidised by the utility.
“The result had been an increase in the quality of life for thousands of people,” said Heymans said.
Infrastructure investment spending has quadrupled, exports have increased and Africa is receiving a growing share of foreign direct investment, according to President Jacob Zuma.”It is not surprising therefore that infrastructure development took centre stage at the World Economic Forum on Africa meeting in Cape Town on 3 to 5 June,” he said.”These positive trends come on the back of improved governance and a much sounder approach to macroeconomic management in our continent. We need to sustain these trends and deepen them,” Zuma said yesterday during the President’s Co-ordinating Council (PCC) meeting at Tuynhuys in Cape Town.At the meeting were premiers and local government representatives; it was held to discuss governance and how to improve the performance of government at all three levels.Infrastructure development work in all provinces and municipal metros is co- ordinated through the Presidential Infrastructure Co-ordinating Commission (PICC), led by the president. The president also chairs the Presidential Infrastructure Championing Initiative (PICI), a programme of the New Partnership for Africa’s Development. It reports to the agency’s Heads of State and Government Orientation Committee.
The PICI aims to facilitate continuous dialogue and work to boost infrastructure development. South Africa was given the task of co-ordinating the North-South Corridor, focusing on road and rail. The initiative links heads of state and government to specific infrastructure corridors to ensure strategic political leadership in the championing of cross-border infrastructure projects.It is primarily tasked with bringing visibility to the infrastructure projects, facilitating the unblocking of bottlenecks and any political impasse, providing leadership in resource mobilisation and subsequently ensuring speedy implementation.”Infrastructure development is one of our key job drivers together with tourism, manufacturing, mining and beneficiation, the green and blue economies and agriculture,” Zuma said.”We are refurbishing and building new schools, clinics and hospitals; we are building three universities and 12 training and vocational education colleges; and we are constructing and improving rail, roads, ports, broadband, roads, dams and power stations.”What we are doing in the country dovetails with the continental infrastructure programme.”
Catalyst for economic development
Regional integration is the key and infrastructure development is a catalyst for economic development on the continent. Many of the regional economic communities have developed regional infrastructure plans to facilitate regional trade and investments. However, it is also important to invest in national infrastructure, in addition to regional infrastructure.These are projects that should ultimately unlock the economic potential of the continent and provide development opportunities for communities, cities and regions.The North-South Corridor championed by South Africa is a multimodal and multidimensional infrastructure corridor that includes road, rail, border posts, bridges, ports, energy and other related infrastructure. It passes through 12 countries – Tanzania, Congo, Malawi, Zimbabwe, South Africa, Zambia, Botswana, Mozambique, Kenya, Ethiopia, Sudan and Egypt.These projects form the nucleus of the implementation of the broader Programme for Infrastructure Development in Africa (Pida). Pida is a multi-sector programme covering transport, energy, transboundary water and telecommunications and ICT. It is dedicated to facilitating continental integration in Africa through improved regional infrastructure and is designed to support implementation of the African Union Abuja Treaty and the creation of the African economic Community.Pida is a joint initiative of the African Union Commission, the New Partnership for Africa’s Development Planning and Co-ordination Agency and the African Development Bank.Progress has been made by the championing countries to bring these projects to a reality, which will be discussed at the 33rd Nepad Heads of State and Government Orientation Committee meeting tomorrow.
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Malusi Gigaba writes that our socio-economic development is and must be linked with the rest of Africa for the AU’s Agenda 2063 to be realised.
Johannesburg – Africa Day presents a chance for South Africans to reflect on our great continent’s shared destiny. Our enduring Pan-African unity is based on unbreakable ties of history, culture and shared struggle, and an awareness that our socio-economic development is and must be linked for the AU’s Agenda 2063 to be realised.
Africa’s support for our struggle was steadfast, principled and costly: When the apartheid regime tightened its noose around the necks of the oppressed, and banned the national liberation movements in 1960 following the Sharpeville protests, Africa opened her arms to receive our freedom fighters as exiles. They extended their unconditional warmth, friendship, solidarity and hospitality to our freedom fighters. Even the poorest of African states gave their all in support of the South African liberation struggle.
For this support, innocent citizens of Lesotho, Botswana and Mozambique were butchered in their sleep by the apartheid army, and Zimbabwean and Angolan territories were violated by a regime that had no respect for human life, let alone the national sovereignty, territorial integrity and stability of its neighbours.
South Africa’s liberation in 1994 guaranteed Africa’s long-term stability and development. It meant the country ceased to be what Hendrik
Verwoerd had called “a piece of Europe on the tip of the African continent”.
The struggle bore a Pan-African identity with historic responsibilities that stretched far beyond South Africa’s borders. During the past two decades, the liberated South Africa has contributed towards the new African renaissance by supplying the materials requisite towards this all-encompassing effort.
South Africa was among the foremost advocates for the development and adoption of the New Partnership for Africa’s Development (Nepad). We invested time and resources towards uniting the continent, helping to forge a united global political and economic agenda at a time when imperialism and the neo-liberal globalisation was further marginalising and ruthlessly exploiting the continent.
For Africa to develop on a sustainable basis, we need to entrench peace, democracy and good governance, and advance major economic growth strategies, including infrastructure investments; beneficiation of mineral wealth; industrialising and diversifying of economies to free ourselves from the resource curse and drastically improving intra-African trade and trade with other emerging economies.
Only these programmes can radically alter Africa’s relations with itself and the world, and place it on a footing for sustained growth, job creation and enhanced political power in the global arena.
South Africa needs Africa: It has integrated itself into the continent not only through political and peace efforts, but increasingly through growing investment, trade and tourism.
While the country remains largely an exporter of primary commodities and an importer of manufactured goods, during the past 20 years sub-Saharan Africa, including Nigeria, Ghana and most of the Southern African Development Community (SADC), has emerged as the largest importer of South African-manufactured goods. It has been estimated South Africa exported about R300 billion worth of goods last year. Trade, investment and tourism with the rest of the continent has created and sustained 160 000 jobs in South Africa.
While we celebrate the growth of South African trade and investment in Africa, there is an obvious imbalance in favour of South Africa. So, if Africa is so vital for the South African economy, it should stand to reason that African integration, intra-African trade and the overall growth and development of the African economy should be equally as important.
We cannot do this alone! Our global political and economic aspirations are interconnected with, and not separate from, the continent as a whole.
We are one! We cannot fulfil our historic role and responsibility to raise Africa’s position in global affairs if the people of the continent think we have a condescending attitude towards them or want their support, but do not want to help them in their hours of need.
The recent violence against African migrants is inexcusable and has cost us. The attacks set back our African agenda. We must not take this for granted, or be naive as to the cost we incurred.
While fellow Africans may understand they have a responsibility to address the “root causes” of migration, to fix their economies and minimise the incentives for their nationals to travel to South Africa at all costs, they also know we have a responsibility, out of an African solidarity, to help build their economies because they supported our struggle to defeat apartheid.
Agenda 2063 can only be achieved by sustained, co-ordinated actions between increasingly integrated African countries.
South Africa has made critical contributions in this regard and will continue to do so in a quest for a better life for all.
* Gigaba is Minister of Home Affairs and member of the ANC NEC. A version of this article appeared in the ANC Today.
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