Inadequate infrastructure hampers Africa's development

17 Jul 2012

Inadequate infrastructure saps growth in Africa by 2% each year, according to Ralph Olaye, manager of regional trade and integration at the African Development Bank.

Africa's gross domestic product growth is projected to average 6,2% a year for the next 30 years.

"There will be a six-fold increase in GDP by 2040 and the GDP income per capita will be above the $10 000 threshold for the first time," he said.

To meet these needs, Olaye said there would need to be a massive increase in energy, information communications technology (ICT) and transport infrastructure throughout the continent.

African heads of state, including President Jacob Zuma, have jointly backed the Programme for Infrastructure Development in Africa (PIDA), which requires $360-billion of investment for various infrastructure projects.

Some of the features of the programme include 37 200km of modern highways, 30 200km of rail as well as additional capacity for ports.

Financial resources for the projects are supposed to come primarily from the various states, which will each be required to contribute 0,2% of their GDP, 1% of their national budgets and 2% of their investment budgets.

Various partnerships would also be made with the private sector, Olaye said.

South Africa has already hit the ground running with domestic infrastructure plans through state parastatal Transnet and its planned R300-billion capital expenditure programme over the next five years.

Andrew Shaw, the associate director for capital projects and infrastructure at Pricewaterhouse Coopers (PwC), said while South Africa was above average in terms of infrastructure spending among middle-income countries, it lagged behind larger players such as India.

He said Transnet's market-demand strategy would increase commodities exports and would help bring mining investment back to Africa.

A global PwC study of the top 40 global mining companies showed a quarter of all capital expenditure in 2011 was taken up by South America - driven largely by mining giant Vale.

China showed the largest increase in capital expenditure, driven largely by China Coal.

Only about 15% of capital expenditure by the Top 40 was spent in Africa, and Shaw cited weak infrastructure as a reason.

Source: Business Times via I-Net Bridge.

Source: I-Net Bridge

For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.

We pride ourselves on our wide variety of in-house skills, encompassing multiple platforms and applications. These skills enable us to not only function as a first class facility, but also design, implement and support all our client needs at a level that confirms I-Net Bridge a leader in its field.

Go to: http://www.inet.co.za