As Africa’s economy continues to experience a boost with an anticipated 4.8% growth in 2012, there remains a critical need for robust infrastructures that will support the growth and economic transformation taking place on the continent. Makhtar Diop, the World Bank Vice President for Africa says this will happen primarily through investments in the private sector.
Speaking at the Africa Investor CEO Summit in Tokyo, Diop called for more investors in the private sector, emphasizing that Public Private Partnerships (PPPs) can be an important tool in mobilizing resources and addressing the estimated $30 billion per year infrastructure financing gap in Africa, particularly in energy and transport. Although Africa has shown significant progress and resilience at a time where much of the world’s economies experience a slowdown, Diop asserts that there remains an incredible need, which is the private sector reaching sustainable solutions and more inclusive growth that can be translated into effective poverty reduction.
Diop called for the engagement of African and international pension Funds, capital markets experts and corporate leaders to look into the opportunities on the continent. He also added that investments in human capital and capacity building are essential to sustain the effort, while an increase in transactions within the pipeline across many African markets, and the need for professionals to share information and network with each other becomes more important than ever.
Diop Highlights that one of the biggest infrastructure problems that must be addressed immediately is Energy. “It is hard to compete for foreign direct investment if your energy costs 30 cents per kWh while you could have it at 5 cents in another developing country,” said Diop. “This is an essential problem for productivity and competitiveness in Africa. The whole World Bank Group is working to help countries find long term solutions in energy, and PPPs are essential to this.”
Although The World Bank has contributed significantly towards the fight against Africa’s infrastructure problems, specifically in the areas of energy, transport, and water, there still remains a lot of challenges that need to be addressed in order for the continent to meet and compete on a global level. If you are seeking an investment opportunity in Africa, the energy, transport, and water industries are vital.