THE World Economic Forum on Africa is one fabulous talk shop. Recurring themes are the need for investment, transparency, regulatory reform and infrastructure development.
Much is being made of the fact that on average African country growth is among the fastest in the world. Africa’s time, it is said, has arrived.
Yet one wonders, why after fifteen years, are African governments still marvelling at the possibilities for tele-medicine and tele- education? Meanwhile in Kenya, where young IT entrepreneurs are not waiting for government, functional tools are being developed. One group developed a mobile application that was used to monitor the recent election.
The tool was so successful it was immediately exported to Pakistan, which held its own election this past weekend.
Mobile you see, is not dependant on fixed-line, government-installed networks.
The lack of cheap access to broadband is one reason tele- medicine and tele-schooling have yet to reach their potential across the continent. Africa’s development, it appears, is destined to move at African speed.
Infrastructure, or rather the lack of it, is cited as one of the biggest constraints to African trade, economic growth and job creation.
“Why is it that we are importing from China, when our friends across the border are making the same product; or why are we driving four hours to reach an airport to fly to a town that is a mere 100km away,” said Donald Kaberuka, president of the African Development Bank.
Tired of talk, a group of business leaders and non-governmental organisations decided to actively intervene. At last year’s WEF on Africa, 27 African and global companies, including Sasol, Old Mutual, African Rainbow Minerals, the IDC and Transnet partnered with the WEF and the African Development Bank to form a business working group that aimed to unblock the bottlenecks constraining infrastructure development.
After a year of work ,the project team has identified 51 projects which span sectors from power generation and transportation to water and telecommunications with an overall capital cost of $68bn between now and 2020.
Power generation alone accounts for 15 projects and transportation for 24 projects. One of the problems bedevilling these type of ‘transformational’ projects which typically cross country borders, and are typically beyond the scope of private finance, is the inability of governments to agree on common priorities.
Work in the past year by the Business Working Group and supported by the Boston Consulting Group presents a framework for governments to assess a project based on clear economic, technical, social and regional criteria.
The development of a common framework is designed to accelerate project development and implementation.
“The classic PPP model has not worked well,” said South African finance minister Pravin Gordhan, at the launch of the framework. “On average it takes seven years to get a project off the ground. This effort aims to reduce the amount of time it takes to bring a project to the bankability stage.
This provides African governments with a better basis for co-operation within regions and between regions.”
At this point none of the 51 projects – which extend from building an 8 000km power line from Egypt to South Africa to supplying water to Gauteng via a water transfer programme – have been given the go-ahead.
However, several are on the table. “We have moved beyond the discussion of what is bankable to a discussion on what is to be implemented first,” Gordhan said.
The projects will be financed in different ways, but Kaberuka, made it clear that all forms of finance would be considered.
“There is a role for PPP’s as well as the private sector. But this is also about those projects where business finance will not be enough. We are working to see these initiatives through as well. The time for talking has passed.” – sasha@moneyweb.co.za