Piqued by evolving global landscape, the understanding of infrastructure as a mere physical or organisational asset has changed, as it is now viewed from a more expansive and strategic point of view, the World Bank said in a recent report.
For instance, key questions now being raised around infrastructure include whether or not the infrastructure is sustainable, its level of impact, the returns it provides in the long term, among others.
According to the World Bank, beyond the macro-economic environment, health and primary education; infrastructure is one of the key drivers of economic growth.
"Infrastructure plays a determining role in the foreign direct investment into a country's economy. Investors want to know what infrastructure is on the ground to support their business goals.
Securing commitments to investment in infrastructure therefore takes time due to its high risk and long-term requirement," the bank explained.
Over the past few years, developed countries like the U.S, Germany and France have experienced deterioration in the quality of their infrastructure due to current global financial crisis. However, West African countries are some of the most affected by unavailability of functional infrastructure.
According to the World Economic Forum's Global Competitiveness Index that assesses the landscape of 138 economies and provides insight into the drivers of their productivity and prosperity, African countries like South Africa, Kenya, Ghana, and Nigeria were ranked 47, 96, 114 and 127 respectively.
Experts believe that enhanced infrastructure in these countries will reduce the cost of doing business, encourage trade, and ultimately enhance Africa's competitiveness as a destination for investors.
The gap in Africa's infrastructure serves as an untapped opportunity that can be unlocked through scaling up of investments into the vastly promising sector.
The experts who gathered at the Hogan Lovells' Africa forum held in London, noted that the onus does not lie on government alone to close the infrastructure gap. Governments must also explore new opportunities for securing private financing and developing partnerships.
Partner, Hogan Lovells' Infrastructure, Energy, Resources, and Projects Practice Group, Jeremy Brittenden, said: "One of the factors that has deterred infrastructure growth in Africa is the inability to find private investors willing to invest in projects that may not survive in certain political environments."
Senior Partner at AB & David, David Ofosu-Dorte, posited that the democratic processes in African markets deter continuity of investment projects as new governments come into power every four years and the promises made by a previous administration may not necessarily be upheld by the new one or may remain uncompleted after a particular electoral cycle.
But Brittenden believes that vast opportunities exist for the infrastructure sector in Africa. "The government just needs to put institutional mechanisms and policies in place to mitigate investors' fears," he said.
The World Bank estimates that Africa needs to spend about $93 billion annually until 2020 in order to bridge the infrastructure gap and keep pace with current growth rates.
While this is important, there must also be a call for the injection of fresh, enabling, and attractive policies by governments.
African leaders should take a page out of Australia's strategy in creating advisory bodies to advise the government, investors and sectoral infrastructure owners on existing and prospective infrastructure needs that may affect the country's economy.
These bodies will be better equipped to give strategic advice and propose policy goals to the relevant government authorities, who will then develop the appropriate framework.