Africa needs $93 billion annual infrastructure

subscribe

Sub-Saharan Africa needs to double its infrastructure spending to (US)$93-billion a year, 15% of regional output, to drag its road, water and power networks into the 21st century, a report said.

The research compiled by the Infrastructure Consortium for Africa (ICA) identified the continent's woeful electricity grids as its most pressing challenge, with 30 countries facing regular blackouts and high premiums for emergency power.

Despite the gulf between its target figure and the (US)$45-billion spent now, the report said governments could narrow the funding gap to (US)$31-billion by making (US)$17-billion in relatively simple efficiency gains, such as making more electricity users pay their bills.

The report said that infrastructure improvements to date, mainly in telecoms, had accounted for more than half of the pacy growth rates of recent years on the poorest continent. Analysts and policymakers have tended to regard high commodity prices, debt relief and improved governance as drivers of the 5% average annual growth experienced from 2003 to 2008.

But frequent blackouts and poor roads still cause headaches and unnecessary costs for business and trade, the report said.

If all sub-Saharan Africa's 48 countries caught up with Mauritius, the Indian Ocean island that leads the region in infrastructure terms, overall growth would rise by 2.2 percentage points, it added.

"In most African countries, particularly the lower-income countries, infrastructure emerges as a major constraint on doing business, depressing firm productivity by about 40%."

In the power sector, sub-Saharan Africa needs to build 7,000 megawatts of capacity a year to meet the demand of the region's 800 million people, who currently have access to the same amount of power as Spain, with a population of just 45 million.

"Power consumption, at 124 kilowatt-hours per capita annually and falling, is only 10% of that found elsewhere in the developing world, barely enough to power one 100-watt light bulb per person for 3 hours a day," the report said.

In other comparisons highlighting the extent of the problems, the report said the region had less than a quarter of the paved roads found in other parts of the developing world — but three-quarters the number of mobile phones.

Poor economies of scale or lack of competition in many countries meant Africa's services costs were "exceptionally high by global standards".

"Whether for power, water, road freight, mobile telephones, or Internet services, the tariffs paid in Africa are several multiples of those paid in other parts of the developing world."

For instance, moving a tonne of goods one kilometre in Africa costs between 4 and 14¢ (US), compared to between 1 and 4¢ (US) in other developing regions, the report said.

African taxpayers are funding two-thirds of the current spending, with the rest coming from outside sources, such as private investors or overseas aid. Private investment was highest in technology and telecoms, the report said.

The ICA was launched at a G8 summit in Scotland in 2005 and its members include, among others, the G8, World Bank, African Development Bank and European Commission.

Related News

canadians-support-tariffs-on-energy-and-minerals-in-us-trade-dispute

Canadians Support Tariffs on Energy and Minerals in U.S. Trade Dispute

OTTAWA - A recent survey has revealed that a significant majority of Canadians—approximately 75%—support the implementation of tariffs on energy exports and critical minerals in response to trade tensions with the United States. This finding underscores the nation's readiness to adopt assertive measures to protect its economic interests amid escalating trade disputes.​

Background on Trade Tensions

The trade relationship between Canada and the United States has experienced fluctuations in recent years, with both nations navigating complex issues related to tariffs, trade agreements, and economic policies. The introduction of tariffs has been a contentious strategy, often leading to reciprocal measures and…

READ MORE
manitoba power lines

Tories 'taking the heart out of Manitoba Hydro' by promoting subsidiaries, scrapping low-cost pledges: NDP

READ MORE

powerlines

Report call for major changes to operation of Nova Scotia's power grid

READ MORE

Paying for electricity in India

Paying for electricity in India: Power theft can't be business as usual

READ MORE

tva cumberland

TVA faces federal scrutiny over climate goals, electricity rates

READ MORE