High inflows to Africa’s infrastructure sector bode well for growth. But stubborn obstacles – from procurement to currency denomination choices – now need to be tackled.
From new airports in Kenya, Senegal and Rwanda to the interstate railway project promising to connect Sudan and Chad, Africa is in the throes of an infrastructure boom. Construction industries are flourishing in Angola and Nigeria. In sandy Lamu, a new port could transform the export potential of Kenya, Ethiopia and South Sudan.
Transport corridors along southern Africa promise to strengthen integration, especially between South Africa and Mozambique. Ambitious new financing mechanisms are under debate; most recently, the African Development Bank’s infrastructure bond scheme to raise $22bn for ports, railways, roads and energy. China’s presence has brought undreamed-of quantities of infrastructure capital, and Western mining companies are drawing up infrastructure proposals to improve the competitiveness of their resource bids.
But this is not the continent’s first infrastructure investment frenzy. After independence, governments penned similarly ambitious plans, and European and American financiers piled in. Even Zaire, one of the continent’s most chaotic countries, attracted billions of dollars to support copper, manufacturing, steel and energy projects. But for all the transformational rhetoric across the developing world in the post-war era, it was only East Asia that deployed infrastructure spending at the rate and quality necessary to set off sustained high growth. Investment trends were low in Africa. Between 1960 and 1994, the continent invested 9.6 percent of GDP overall, while the proportion of other developing countries was 15.6 percent.
The public investment that was released often served prestige purposes rather than progressive ones. In the 1960s, when Ghanaian hospitals were out of medicines and industries starved of materials, Kwame Nkrumah spent $16m on a gigantic conference hall, with water fountains and banqueting halls, for a single meeting of the Organisation of African Unity. Siaka Stevens copied, spending two thirds of Sierra Leone’s budget on buildings for the OAU, while the Togolese government spent half the national budget on a thirty storey hotel in Lomé. More mundane investments like rural road infrastructure and sewage systems often went wanting.