"Closing Africa’s infrastructure gap is essential for reaching the MDGs" by Lynette Chen
The chances of Africa reaching the MDGs in the most part will be determined by the region’s ability to tackle critical infrastructure challenges. Basic infrastructure, whether transport, energy, or water and sanitation, are amongst the most fundamental conditions required to support social development and sustained economic growth.
Energy and transportation remain the main bottlenecks in Africa. To put in perspective the scale of the challenge in sub-Saharan Africa, over 500 million people have no modern energy services and as low as only 8 per cent of those living in rural areas have access to any electricity. Costs and delays in transportation and electricity shortages can raise overall costs of doing business by 20-30 per cent. Accelerating migration from rural to urban areas is leading to an increase in disease and infant mortality due to a lack of clean water and basic sewerage services.
For Africa to achieve the MDGs, it is estimated that the region’s infrastructure needs are close to a total of $40 billion per annum over the next 10 years, with nearly two-thirds of the investment needed in the energy sector. Concerted action needs to be taken now to meet the costs of the infrastructure gap.
Alongside increased investment in regional, national, urban and rural infrastructure, a key requirement is the establishment of a coherent strategic framework to define, implement and monitor infrastructure development across the region, in addition to partnerships that promote economic integration and support the development of intra-African trade. It is here that Africa can learn some important lessons from the success of China’s special economic zone model, and it is significant that China is currently contributing to the development of five economic zones in Africa, based on this approach.
The economic benefits of a more integrated cross-border approach to infrastructure development are becoming increasingly clear. Infrastructure development corridors, linked cross-border rail, road, air and sea networks, not only have the potential to facilitate higher levels of cross-border trade, they also provide a strong platform from which to plan and develop economic hubs and drive industrial development around a growing and improving infrastructure network. The South Africa – Mozambique Maputo corridor provides a model for the planned Spatial Development Corridors, plotted across Africa, of which twelve are in an advanced stage of development.
Business has a key role to play here. Public-private partnerships remain fundamentally important to meeting Africa’s infrastructure goals. Beyond the provision of finance and expertise, the commercial opportunities being generated as a result of successful infrastructure projects are creating jobs and providing opportunities for local businesses through the value chain.
Poor infrastructure is a critical barrier to accelerating growth and alleviating poverty. A properly developed infrastructure will reduce the costs of doing business, enable access to markets and advances in agriculture, facilitate trade and regional and global economic integration and assist human development, and in the process, give the region a fighting chance of reaching the MDGs.
Lynette Chen is Chief Executive of the NEPAD Business Foundation in South Africa
Energy and transportation remain the main bottlenecks in Africa. To put in perspective the scale of the challenge in sub-Saharan Africa, over 500 million people have no modern energy services and as low as only 8 per cent of those living in rural areas have access to any electricity. Costs and delays in transportation and electricity shortages can raise overall costs of doing business by 20-30 per cent. Accelerating migration from rural to urban areas is leading to an increase in disease and infant mortality due to a lack of clean water and basic sewerage services.
For Africa to achieve the MDGs, it is estimated that the region’s infrastructure needs are close to a total of $40 billion per annum over the next 10 years, with nearly two-thirds of the investment needed in the energy sector. Concerted action needs to be taken now to meet the costs of the infrastructure gap.
Alongside increased investment in regional, national, urban and rural infrastructure, a key requirement is the establishment of a coherent strategic framework to define, implement and monitor infrastructure development across the region, in addition to partnerships that promote economic integration and support the development of intra-African trade. It is here that Africa can learn some important lessons from the success of China’s special economic zone model, and it is significant that China is currently contributing to the development of five economic zones in Africa, based on this approach.
The economic benefits of a more integrated cross-border approach to infrastructure development are becoming increasingly clear. Infrastructure development corridors, linked cross-border rail, road, air and sea networks, not only have the potential to facilitate higher levels of cross-border trade, they also provide a strong platform from which to plan and develop economic hubs and drive industrial development around a growing and improving infrastructure network. The South Africa – Mozambique Maputo corridor provides a model for the planned Spatial Development Corridors, plotted across Africa, of which twelve are in an advanced stage of development.
Business has a key role to play here. Public-private partnerships remain fundamentally important to meeting Africa’s infrastructure goals. Beyond the provision of finance and expertise, the commercial opportunities being generated as a result of successful infrastructure projects are creating jobs and providing opportunities for local businesses through the value chain.
Poor infrastructure is a critical barrier to accelerating growth and alleviating poverty. A properly developed infrastructure will reduce the costs of doing business, enable access to markets and advances in agriculture, facilitate trade and regional and global economic integration and assist human development, and in the process, give the region a fighting chance of reaching the MDGs.
Lynette Chen is Chief Executive of the NEPAD Business Foundation in South Africa
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