19 December 2008

The Bank is Driving the African Continent Forward Through Financing of Regional Transport and Energy Infrastructure Programs

SPONSOR WIRE

Africa's leading Financial Institution, the African Development Bank Group (AfDB), has placed both infrastructure and regional integration at the centre of its operations. AfDB's development approach gives high priority to promoting regional cooperation and integration to enable countries of Africa to gain from economies of scale and the benefits of larger markets that improve the productive capacity of Africa's economy.

Having identified infrastructure and regional integration as major parameters for economic growth and poverty reduction in Africa, the New Partnership for Africa's Development (NEPAD) has entrusted AfDB with a leading role in infrastructure development. The existing state of infrastructure constitutes a serious handicap to African productivity and competitiveness. Addressing Africa's regional infrastructure needs is therefore a prerequisite to its development.

Regional integration is essential to building markets, creating robust and diverse economies, increasing opportunities for growth, and attracting new sources of investment finance. Regional integration is key for Africa, where 40% of its population and one-third of its economies are trapped in landlocked countries whose trade and development depend on events that happen beyond their own borders. As such, AfDB aims to focus on deepening economic, commercial and policy harmonization; concentrating on investments in regional infrastructure and support to Regional Economic Communities.

AfDB continues to develop and implement diverse, innovative, and results-oriented projects centered on augmenting its infrastructure investments in Regional Members Countries (RMCs), primarily in the Transport and Energy sectors, by mainstreaming concerns relating to climate change, gender, the environment, and social impact to ensure that maximum social and economic benefits are achieved and long term sustainability is assured. The Bank has recently approved three major infrastructure projects that will have a significant impact on Africa's regional integration and economic growth.

Nigeria-Cameroon Transport Facilitation Program - Major highway between ECOWAS and ECCAS

The Transport Facilitation Programme for the Bamenda-Mamfe-Abakaliki-Enugu Corridor, a first for Africa, connects both the Central and West Africa regions through its respective leading economies - Cameroon and Nigeria. This program will not only enhance regional trade and cooperation, but is also regarded as one of the most effective confidence-building measures between the two nations.

With the Bank's contribution of USD 305 million, the program aims to put to standard 400 km of paved roads and highway structures on the corridor stretching from Bamenda, Cameroon to Enugu, Nigeria, which is part of the Lagos-Mombasa Trans-African Highway. With the new all-weathered road, trade in both manufactured and agricultural products will be boosted between the two countries that have been isolated due to poor transport links. The Project Area on the Cameroonian side is one of the breadbaskets of the country, with most of its food production sold in nearby markets. Enugu is an important industrial city of Nigeria and Abakaliki (capital of Ebonyi State), the other major town along the corridor, is a reputable commercial centre for agricultural products.

From a social perspective, this program connects communities; increases access to markets, alleviates poverty, reduces time traveled on the road and enables the project affected people to be engaged in more economic activities. It gives greater access to education and health centers, and provides a route for economic and social growth for women, men and children. Due to this investment, transportation costs will be reduced to nearly a third creating savings for other economic and social activities.

In addition, the programme seeks to improve the efficiency of the logistic chain of transport along the Bamenda-Enugu corridor through transport facilitation measures. A Protocol of agreement has been signed for the first time between ECCAS and ECOWAS to govern the removal of obstacles to the free flow of traffic through the building of a common border checkpoint and limiting the number of checkpoints along the road.

Electric Power Interconnection between five countries

With AfDB financing totaling USD 149 million, the Interconnection of the Electric Grids of Nile Equatorial Lakes Countries project is consisting of the construction and upgrading of 800 km of power transmission lines to interconnect the electricity grids of 5 countries (Burundi, DR Congo, Kenya, Uganda, and Rwanda) in a challenging political environment. With coverage of 286,350 kmÂ' over the Nile Equatorial Lakes Basin, the project seeks to improve the living conditions of an estimated population of 135 million by enhancing the availability of affordable electricity. It will improve the quality and impact of national development programmes in such areas as education, health, communication, administration, water supply and sanitation by allowing efficiency gains from the use of electricity, especially in rural areas that do not yet have access to modern energy services.

For the Bank, this is not a typical regional integration project in the infrastructure sector. What sets this project apart is that it represents a central part of the Nile Basin Initiatives (NBI) actions program aiming at developing the common Nile water resources for greater prosperity and peace and to promoting joint actions among the five governments so as to eliminate poverty and strengthen regional cooperation. In supporting its implementation, the Bank is contributing to the creation and operation of the basic infrastructure required for the promotion of cooperation and the integration of the energy sectors of these countries, thereby fostering increased cross-border trading of electricity and facilitating the development of energy resources on a regional basis and at a lower cost. The project lays the necessary groundwork for the creation of a regional electricity market that would include not only the Nile Basin countries but also those of the East African Power Pool. The advent of such a market will have a considerable positive impact on the development of major electricity generation plants, identified in the regional generation master plan, notably hydroelectric power plants, by fostering the participation of the private sector in the investments needed to construct and operate such plants.

Study on the Road-rail Bridge between Kinshasa and Brazzaville and the Kinshasa-Ilebo Railroad

The Bank's work in regional integration also goes beyond project financing. It also provides technical assistance. The AfDB recently provided financing for a feasibility study to realize a longtime dream - a bridge across the Congo River to link the capital cities of the two Congos, Kinshasa (Democratic Republic of Congo) and Brazzaville (Republic of Congo), and a 1,015 km railway to connect the cities of Kinshasa and Ilebo in the DRC.

The implementation of the road-railway bridge project between Kinshasa and Brazzaville and the extension of the Kinshasa-Ilebo railway are intended to accelerate trade between the two countries and to fill one major missing link in the Tripoli-Windhoek corridor. The overall objective of the study is to design a set of infrastructures aimed at: (i) improving regional transport and trade systems through the construction of a fixed crossing - linking Kinshasa and Brazzaville, and (ii) ensuring continuity in railway traffic from Matadi (the major port town in DRC), and Lubumbashi, the Shaba province capital in the copper belt DRC and, beyond. This will also facilitate linkages, towards the southern parts of Africa (Zambia, SAR, and a good potential for linking Eastern Africa region by rail), and consequently, facilitating railway network interconnections in Central, Eastern and Southern Africa.

The above-mentioned examples of good work by AfDB present an opportunity for a greater outlook and continued investments in regional projects that promote regional integration. These projects can be viewed as the glue that binds our regions socially and economically while alleviating poverty and contributing to national and regional economic growth.

Much work remains to be done, nonetheless, to attain Africa's full integration. Despite significant investments and the establishment of regional political institutions and associated technical bodies, whether one looks at power, roads or ICT, Africa's infrastructure network remains fragmentary and fails to provide good regional and continental connectivity. The Bank's infrastructure interventions have consistently prioritized regional integration and part of the Bank's success resides in its strong partnerships with the African Union (AU), Regional Economic Communities (RECs) and Development Institutions.

Under the Bank's leadership, efforts are currently underway to strengthen the capacity of regional institutions to act as effective facilitators of regional infrastructure development. The African Union Commission is coordinating plans and priorities to establish a single vision for cross-border infrastructure and will be hosting The Twelfth African Union Summit of Heads of States and Government meeting, in February 2009, which will be devoted to Africa's infrastructure.

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