Tuesday, November 23, 2010

africa's infrastructure deficit creates economic opportunity

Mmegi | The Development Bank of Southern Africa executive coordinator Lesetsa Matshekga said that the continent's biggest infrastructure deficit existed within the power generation sector. He noted that around 22, 000 MW of crossborder transmission lines would be needed within the next couple of years. While sub-Saharan Africa was home to 800-million people, it generated the same quantum of power as Spain.

Physical infrastructure remains Africa's most significant constraint as far as economic development goes, however, the backlog also represents big investment and business opportunities head of research and information at South Africa's Industrial Development Corporation (IDC), Jorge Maia, said. Speaking at the Gordon Institute of Business Science Business of Africa conference in Johannesburg, Maia said that some $93-billion a year was needed to build infrastructure in sub-Saharan Africa alone.

With the region expected to show economic growth of 5,5% a year over the next five years, the development of infrastructure creates a wealth of opportunity.

"As the region and Africa keeps on growing, this infrastructure gap will just become more evident," said Maia.
There are several limiting factors that come into play in the development of infrastructure on the continent, the most significant of which is a large funding gap.

However, AngloGold Ashanti CEO Mark Cutifani said at the conference that private companies could, to a large extent, assist in bridging some of these funding gaps.

"If African governments and private enterprises are able to work together, and form public-private partnerships, this can fill the gap to some extent."

Cutifani emphasised that infrastructure cooperation and an enabling environment created by governments across the continent were imperative for the future development of Africa.

"The time has come to develop infrastructure beyond colonial borders in Africa, from east to west and from north to south."

Maia agreed, but added that Africa also had to rethink the pricing of its existing infrastructure and services. He pointed out that Africa was the most expensive continent to transport goods.

"This is something that can easily be readjusted."

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