In a period of rapid advancement worldwide, Africa’s development needs remain huge. Why? Closing the infrastructure deficit in Africa entails recognizing the numerous barriers impeding economic growth and prosperity. Environmental, social and governance factors should not be ignored.
Over the past two decades, the region has expanded core infrastructure, such as telecommunications networks and access to safe potable water, but developmental progress has generally been too limited, with Africa remaining the only world region where there has been a decline in road network density and almost no improvement in per capita electricity-generating capacity. Investment in development infrastructure has also been insufficient: according to recent statistics,
Africa has a development financing gap of nearly USD 108 billion and an estimated need for infrastructure investment of between USD 130 billion and USD 170 billion.
Africa’s development gap and relatively slow progress present attractive investment opportunities for developmental projects focused on building intra-regional transport networks, creating power generation solutions, revolutionizing manufacturing and agro-processing, and achieving environmentally responsible natural resources extraction. But the chances of meeting this potential are hampered by fundamental challenges limiting the involvement of potential financiers. To successfully fund infrastructure development projects, financial investors need to identify, understand and overcome these challenges.