High-profile keynote speakers include the likes of South Africa’s Deputy President Cyril Ramaphosa and chairperson of the Africa Union, Dr Nkosazana Dlamini Zuma.
We interviewed Liz Hart, managing director of Infrastructure Africa, to find out what some of the highlights are at this year’s conference, and what the general sentiment of investors doing business in Africa is right now.
As always, content is king. Our content sets us apart from other infrastructure events because those setting the programme and agenda for Infrastructure Africa 2016 are Africa’s leading infrastructure investors. With this year’s African Development Bank (AfDB) partnership, we are hosting the Africa Inclusive Infrastructure Forum (AIIF) during the conference which focuses on empowerment of women in the infrastructure space. Geraldine Fraser-Moleketi, the AfDB Special Envoy on Gender, and several of her high profile colleagues will present the case for inclusive infrastructure. In addition, with the challenges being faced by South Africa’s economy, there is a big focus on regional opportunities for South African businesses and a call to action for South Africans to look beyond our borders for new business opportunities.
How has the conference been developed since last year’s event?
The event is now in its fifth year and continues to grow year-on-year. This year welcomes the partnership of the African Development Bank (AfDB). Other partners include the Development Bank of Southern Africa (DBSA), and the NEPAD Planning & Coordinating Agency (NPCA). We continue to have many corporate sponsors. We have the highest level of endorsement of any infrastructure event on the continent. It has become the go-to event for infrastructure players on the continent and it plays an important role in networking and catalysing new business opportunities across Africa.
What is the general sentiment of investors doing business in Africa right now?
Although growth in sub-Sahara Africa (SSA) has relatively slowed, two-thirds of the region’s economies are still growing at rates above the global average and SSA remains the second fastest-growing region in the world in the foreseeable future. Africa is actually one of only two regions in the world in which there has been growth of foreign direct investment (FDI) projects over the past year.
What are some of the bottlenecks for infrastructure development in Africa?
Many businesses think of countries or regions in Africa as single-driver opportunities, which when buoyant, offer great short-term opportunities, but when depressed, signal the time to leave. But sub-Saharan Africa’s mining and energy belts that were initial drivers of development have opened up support infrastructure opportunities that offer growth prospects in the longer term. The years ahead will be challenging, not because the opportunities are not there, but because the opportunities are likely to be more uneven than before and will require a long-term investment view.
What trends are currently driving Africa’s infrastructure sector?
Low commodity prices have tempered the desire of many companies to involve themselves in Africa, but this is, arguably, the best time for those with longer-term ambitions to integrate their operations into key development nodes.
There is an evolution of infrastructure development that takes place over the longer-term and the underlying drivers will be highlighted at the Infrastructure Africa 2016 conference on 9 and 10 June 2016 at the Sandton Convention Centre. With discussions on specific project development opportunities from infrastructure players operating on the ground, the Infrastructure Africa offers businesses the opportunity to set their regional strategies for long-term growth.
In which African countries are we seeing the most progression? What’s driving this development?
In Tete, Mozambique, for example, coal and infrastructure projects have slowed, but there are agri-industrial and support infrastructure opportunities. There is also a much broader regional, national and sub-national opportunity that is unfolding from Southern to East Africa, which is becoming an energy corridor.
How important are public-private partnerships in developing Africa’s infrastructure sector?
In the face of growing international competition in sub-Saharan Africa, South African-based companies need to take a long-term strategic view of the region. Companies need to develop a local presence and integrate their strategies with the evolving economies and underpinning infrastructure in the region. A local presence does more than wave a flag: it demonstrates commitment to the future, it allows for in-country intelligence gathering and goodwill (and ultimately contracts) from project developers and government. Without the presence of private sector companies in the region, there will be no partnerships with governments and therefore no development.
What is the most critical sector for infrastructure development in Africa? Why?
The importance of digital infrastructure in leapfrogging Africa’s economies cannot be overestimated, but without physical infrastructure that provides access to water, food, electricity and healthcare, the continent cannot attain the quality and standards of life set out by the Sustainable Development Goals (SDGs). So all sectors of infrastructure are critical for life whether it be water, transport, power and then ICT & telecommunications infrastructure which are necessary for job creation and remaining globally competitive.
South Africa’s public sector will spend as much as $707.6 million (R8.8 billion) on information and communications technology (ICT) expenditure per year by 2019, new research from Frost & Sullivan showed late last week.
This bodes well for e-government service delivery that most public sector departments are pushing through, says the study titled, “ICT Spend in South Africa: Public Sector”.
This will also improve ICT expenditure through investments in infrastructure, software licensing, specialised computer systems and systems development, the report adds.
Frost & Sullivan ICT industry analyst Naila Govan-Vassen, said: “ICT spend will centre around updating IT hardware and data centres and on supporting systems integration, especially within the health, education and administrative departments.”
The report says the public sector saw expenditure in ICT rise to $615.9m in 2014.
This is now projected to reach $707.6m in 2019, with “managed services, combined with fixed and non-cellular connectivity” set to account for about 73.1 percent of these investments.
“South Africa’s National Development Plan, the national integrated ICT policy green paper, and the broadband policy are expected to drive the development and uptake of e-government services,” added Govan-Vassen.
Despite the growing realisation by the government of the importance of prioritising investment and utilisation of ICT platforms to spearhead e-government in service delivery, the private sector is still seen as a major player in achieving this.
Public private investments and partnerships will be needed to spearhead this and enhance greater accountability and sustainability.
“The breadth of knowledge and expertise that the private sector can bring on board will complement the government’s commitment to strengthen ICT integration and accelerate digitisation in the… public sector,” said Govan-Vassen.
However, experts say drawbacks such as limited infrastructure investment and cloud computing security issues should be addressed in-order to help to attain this.
The coming months should see construction start in earnest on the R84 billion Chinese-driven “smart city” project, on Johannesburg’s East Rand, which will be completed over a 15-year period.
Anthony Diepenbroek, CEO of Zendai Development SA – the local arm of Hong Kong-based Shanghai Zendai Investments – says the “smart” concept for Modderfontein New City, as the development is known, is not limited to ICT services such as connectivity and fibre-to-the-home.
“We envisage that once the new city begins to take shape, smart systems will not only provide world-class ICT infrastructure, but also enable efficient use of resources and provide services that are responsive to people’s needs. The smart city elements will be all pervasive and not limited to ICT functions – but also cover energy, healthcare, water, waste and education.”
He says the new city will embrace smart technology to aid in the administration of city services, as well as reduce congestion, pollution, and energy consumption through sustainable development practices.
“Modderfontein New City is expected to be the first smart city in the country with services and systems designed into the fabric of the built environment from the outset.”
Zendai Development SA notes, once completed, the planned development is expected to infuse an additional employment boost in the Ekurhuleni metro, generating up to 200 000 white- and blue-collar jobs.
The company also expects the smart city development will create a significant amount of jobs and contribute billions of rands to the economy during the construction phase. According to an economic assessment, prepared by the Bureau for Economic Research (BER) in March last year, “there may be significant economy-wide benefits stemming from the Modderfontein development”.
The BER assessment – based on the 15-year development period and data supplied by the developers – indicates an annual contribution to the economy of R13.5 billion and the creation of more than 21 000 jobs a year.
Diepenbroek claims the project will see some of the biggest construction activity since the country hosted the soccer World Cup in 2010. “The model is skewed towards partnerships with local developers and/or the on-selling of parcels of land to independent developers. We expect the project to create significant downstream opportunities for even students in artisans’ institutes in the vicinity.”
He adds skills and knowledge transfer is an imperative to a project of any size. “Given the footprint of Modderfontein New City, we trust we will be able to run a robust knowledge transfer programme in project management and engineering, safety, sustainability, project controls and other specialties.”
Diepenbroek also allays fears that skills for the construction of the smart city would be resourced mainly from China, meaning the local labour force would not benefit. “As an organisation, we will seek to attract and develop the right mix of skills to support the development. To ensure a flow of the right talent to grow the business over time, we will be looking at hiring both locally as well as globally to build our talent pipeline.
“We seek to make a direct and meaningful contribution to economic and social inclusion by employing local talent. If certain skills are not available in South Africa, we would look at the global pool for such skills. However, we will have a programme to ensure these skills are transferred to South Africans. As a business, we are committed to meeting the prescribed employment benchmarks.”
Diepenbroek points out the development will be managed by Zendai Development SA, which will ensure contracts awarded to suppliers – both local and international – will follow due process and comply with regulatory and local government requirements.
He further notes the technology components for the smart city development would be sourced both locally and internationally. “The city will be rendered ‘smart’ through a collection of technologies cutting across many industries – transportation and traffic management, energy, telecoms and IT, electronics and surveillance, etc.
“To manage this torrent of information on a project the size of Modderfontein New City – we will have to rely on both local, as well as international suppliers. No one firm can cover the entire industry chain, in our opinion.”
The proposed development has also raised concerns among the Wetland Society of SA. According to environmental consultant and Wetland Society board member Paul Fairall, the extended seeps and wetland systems that straddle the Modderfonteinspruit are classified by Gauteng Department of Agriculture and Rural Development as irreplaceable.
Fairall says he will approach Zendai Development SA to discuss the company’s environmental impact assessment permits. However, Diepenbroek says all relevant clearances and regulatory approvals will be sought before any project starts. “Applications for environment clearances are sought on a project basis.
“These include detail related to wetlands, planned public/private open space, and the full spectrum of development parameters. All applications are subject to scrutiny and ultimately approval by the relevant authorities and departments therein.”
He points out Zendai Development SA previously planned and implemented projects such as Modderfontein Reserve and the rehabilitation and restoration of the Westlake wetland, in Modderfontein.
Source: IT Web
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