The Infrastructure Consortium for Africa (ICA) on Tuesday announced a 24% leap in infrastructure financing in Africa in 2018, surpassing $100 billion for the first time, but significant financing gaps remain.
Launched on 12 November at the Africa Investment Forum, the ICA’s Infrastructure Financing Trends in Africa 2018 report shows that financing of infrastructure in Africa reached a new high of $100.8 billion in 2018, a jump of about a quarter on 2017 and 38% up on the 2015-2017 average.
Mike Salawou, ICA Coordinator, and Manager of Infrastructure Partnerships, at the African Development Bank, commented: “Over the years the Infrastructure Financing Trends in Africa report has become an important document for presenting, in a consistent manner, how funding is being mobilised to develop the continent’s infrastructure.
“The report’s publication during the Africa Investment Forum is extremely timely. 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 – one of the key issues addressed during the forum,” Salawou said.
This years’ report shows the role ICA continues to play in institutional and policy reform as well as its consistent financial contribution within the infrastructure space. This, along with a 65% and 33% increase in commitments over the previous 3-year average by China and African Governments respectively, and the role of other multilateral organisations resulted in the 24% increase recorded in infrastructure financing for 2018.
Among the key findings of the report was an increase in financing commitments across all sectors, with a notable increase in the energy sector, which attracted financing commitments worth $43.8 billion, an all-time high and a 67% increase on the 2015-2017 average. The ICT sector also saw record commitments in 2018 of $7.1 billion, mostly from the private sector.
Even with the significant increase in commitments in 2018, there remains a total financing gap of $52 billion to $92 billion per year. Yearly estimates of Africa’s financing requirements range from $130 billion to $170 billion. Water and sanitation has the largest financing gap of all the sectors, based on annual financing needs of $56-$66 billion and a 2016-2018 average commitment of $13 billion.
Panellists Dr. T. Nyirenda-Jere, Dr. B. Ben Yaghlane, Dr. I. Urua, Mr. C. Kirigua and Mr. P. Guislain, addressed key messages highlighted in this year’s report, which includes, the need to increase both public and private sector financing, strengthen governance and improve the quality of infrastructure services.
The Africa Investment Forum took place from 11 to 13 November 2019 in Johannesburg, South Africa, and offered a platform for sourcing funding for bankable African projects, brokering infrastructure deals and providing innovative financial solutions.
The event attracted key global companies, financial players, and public officials who addressed the continent’s critical infrastructure investment gaps.