4 June 2012

Africa: AfDB - Infrastructure Deficit in the Country, Others Hit U.S.$90 Billion

Photo: Capital FM
World Bank for infrastructure.

The African Development Bank (AfDB) has put infrastructure funding deficit in Nigeria and other African countries at $90 billion per year, and total commitment at $55.9 billion, last year.

AfDB's Director, Gilbert Mbesherubusa, said out of the $90 billion deficit, 70 per cent represented capital and the remaining 30 per cent, maintenance, noting that the share of the power in the whole funding deficit was 40 per cent.

Mbesherubusa, who spoke at a discussion on 'Building Bridges between Africa and Emerging Countries: Challenges and opportunities,' organised by BNP Paribas, however stated that last year, total commitment for infrastructure by emerging markets was $55.9 billion. The amount, he pointed out, represented 44 per cent over the figures of 2009.

Giving a breakdown of the commitment, he said, out of the $55.9 billion, Infrastructure Consortium for Africa (ICA) members - the traditional donors - accounted for $29.1 billion while the private sector represented $13.8 billion and China represented $9 billion. He added that Arab funds, India, African regional funds accounted for $4 billion of the total.

Mbesherubusa acknowledged that emerging economies were already playing their roles to bridge infrastructure funding gaps in Africa, "but the challenge is to make them participate more in infrastructure and other sectors because there are issues outside infrastructure, especially in natural resources and agriculture."

He said AfDB was ready to bridge the knowledge gap in negotiation with the emerging economies, adding that the development mandate from the African Union made it imperative for the bank to provide African governments' needed competencies.

The AfDB director disclosed that, in terms of paved road density, Africa had 31 kilometres of paved roads on 100 square kilometres; compared to other regions of the world with 134 kilometres.

He added that for power generation capacity, Africa produced 37 megawatts (mw) per one million population, while other regions of the world generated 326 mw. He also said for electricity coverage, the continent catered for 16 per cent of population, while in other regions had 41 per cent of population had access to electricity.

In his contribution, Ethiopian Finance Minister and Economic Development, Mr. Sufian Ahmed, cautioned that despite the collaboration, African countries needed to build strong institutions and strengthen internal revenue. "African countries, using the Ethiopian experience, must be responsible before seeking external loans," he insisted.

Ahmed argued that unlike in the recent past, emerging economies were showing increasing concerns in sharing their experiences toward sustainable African economic growth.

However, Special Adviser to Ghana's Minister of Finance, Prof. Newman Kisi, lamented that the continent's major challenge was dearth of manpower to manage the aggressive financing programmes of the emerging economies.

According to him, "The need to develop standards and intellectual capacity to effectively manage the issues relating to negotiations and protecting African interests are critical."

He said while the challenges and opportunities were country specific, Ghana successfully compelled the development partners to implement 30 per cent local content in all contracts.

The forum also had in attendance, Chief Representative of the People's Bank of China, Mr. Gao Dingxin; Executive Director of the EXIM Bank of India; Senior Africa Adviser, BNP Paribas, Cheikh Ibrahim Diong, and Head of Middle East and Africa Region, BNP Paribas, amongst others.

The participants, including government and private sector leaders from Africa and emerging economies, collectively agreed that the sustained inflow of development funds from China, India, Brazil, amongst others have provided hope for the continent.

The consensus was that the new economic bridges between the economies were on a mutual and committed basis. The emerging economies defined the new development bridges with Africa as lowering cost of production and creating sustainable shared wealth.

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