The Dilemma of Infrastructural Development in Africa
To say that there is an urgent need for the revitalization, redesigning, and revolution of Africa’s infrastructural development is an understatement. Without an efficient infrastructural system, the growth of the continent’s economy will be constrained.
Unfortunately, default discussions about infrastructural development across the continent dwell mostly on “traditional infrastructures” such as transportation, waste management, energy, water management, etc. But traditional infrastructures are without much value to the economy without well-developed “non-traditional” infrastructures such as Information technology, telecommunications, etc.
The global economy can be divided into three distinct categories based on the state of each country’s infrastructure. These are broadly within the two conclaves of developing and developed economies. This categorization is done using the Global Competitiveness Report (GCR). Countries can fall into any of the three categories; incipient emerging, consolidated emerging, and advanced economies. There are also special categories for countries that have escaped each category but are stuck between the preceding and succeeding levels.
The category of a country is dependent on the rate at which its traditional and non-traditional infrastructures have developed independently. Countries are ranked in the increasing order/level at which their infrastructures are developing.
Incipient Consolidated Advanced
Incipients are countries with low or moderately developed traditional infrastructure and lowly developed non-traditional infrastructure.
Consolidated are countries with moderately and highly developed traditional infrastructures and moderately developed non-traditional infrastructures.
Advanced are countries with highly developed traditional infrastructures and highly developed non-traditional infrastructures.
As expected, almost all African countries are classified as Incipient.
There is a collective agreement that there is an immediate need for the thorough upgrading of infrastructures across the African landscape. Albeit the type and degree of infrastructural development needed differ across national borders. The infrastructural needs of a South African economy are different from that of a Nigerian economy. The South African economy has a moderately developed traditional infrastructure system, unlike the Nigerian economy. In terms of non-traditional infrastructural needs as well, the South African economy leads the Nigerian economy. The Nigerian economy needs to fix the most important traditional infrastructural services while simultaneously focusing on developing non-traditional infrastructural services. While the South African economy needs to ramp up the development of its non-traditional infrastructures.
In summary, there needs to be a balanced approach to developing the two types of infrastructures, and if possible, ensuring that the development of the non-traditional infrastructures outweighs the traditional infrastructures.
Due to the extremely poor state of traditional infrastructures in Africa, it might be economic suicide to delay the development of non-traditional infrastructures till the traditional infrastructures have been developed to an optimum level. For example, nearly 600 million people currently still lack access to electricity in sub-Saharan Africa. As important as access to electricity is to mobile connectivity, it will be calamitous to decide to withhold the development of telecommunications till electricity is at optimal levels.
It has been estimated that the demand for electricity across the continent is expected to increase by 93% by 2035. And within the same timeframe, it is also expected that the number of people on the continent with access to the Internet should increase to at least 300 million. Simultaneous development of both categories of infrastructure is important, but it also comes with a major disadvantage. It is extremely expensive.
The unprecedented rise in national debt stock across the continent within the last five years has made it almost impossible for the government to successfully fund developmental projects. Across sub-Saharan Africa, the average debt-to-GDP ratio is in excess of 50%, up from about 31% in 2012. Some of these countries have extraordinarily high debt-to-GDP ratios, making it impossible for them to even access debt capital for infrastructural development. Eritrea (175%), Cabo Verde (160%), Mozambique (133%), Angola (103%), Mauritius (101%), Zambia (101%), Republic of Congo (85%), and Ghana (83%).
Fortunately, there are foreign private entities that are very interested in funding infrastructural projects across the continent. A McKinsey analysis estimated that this class of foreign investors can unlock a potential $550 billion worth of investments into the African infrastructural development landscape. This can come from a mixture of sources such as government institutions, public and private pension funds, and investment companies. A significant portion of this funding is supposed to come from the USA, with contributions from other countries such as China, the United Arab Emirates, the United Kingdom, and France.
Unfortunately, the abysmal attitude to the implementation of public projects across the region has made this funding scarce. About 50% of the initiated infrastructural projects across the region remained in the feasibility stage, with only about 20% surviving the feasibility and planning stages. And a meager 10% coming to full implementation.
This implies that if Africa must take advantage of the available private and foreign funding opportunities to mitigate the unavailable public funding, its governments must be willing to establish thorough public project implementation systems. These systems must ensure that these infrastructural projects are commercially viable enough for interested private and foreign investors to take a plunge into.
In summary, the current state of infrastructure in Africa is beyond despicable. But as despicable as our traditional infrastructural landscape is, we cannot solely focus on its development without improving the non-traditional infrastructure simultaneously. But this will require a significant amount of financing that the African governments do not currently possess. Therefore, in order to position itself for the potential funding opportunities originating from foreign sources, it must establish an uncompromising public project implementation system that will ensure that these infrastructural projects are commercially viable for foreign entities.
There is a scientific guideline to transparently and excellently implement public infrastructural projects. But these must be developed within the context of each country’s technicalities.
