The AU wants to meet the challenge of infrastructure financing

Infrastructure financing needs have been huge in Africa, despite a sustained growth rate in recent decades. Several approaches are now being explored to mobilize funding through a new direction for the African Union’s Infrastructure Development Program (PAP/PIDA) Priority Action Plan.

Under the theme « Infrastructure financing in Africa », the Lomé meeting of March 13-17, led by the African Union (AU) Specialized Technical Committee (STC) on « Transport, Trans-continental and interregional Infrastructure, energy and tourism « , focused on the stock-taking of financing mechanism for the projects to be implemented in the 2063 Agenda. It also provided an opportunity to analyze the challenges and capacity building of resources at the national and regional levels, to encourage the participation of financial institutions in the development of the continent and promote its financial autonomy.

An autonomous Africa by 2063 

For the participants, the principle of the « three P: public-private partnerships » was chosen as a means to boost the continent’s economy by improving infrastructure. « The issue of infrastructure financing remains a major concern for our continent which is likely to turn into a united, prosperous and autonomous Africa by the year 2063. In this context, we will have to enhance sustainable infrastructure investment and public-private partnerships in Africa to meet the major challenges of the continent, » said Robert Dussey, Minister of Foreign Affairs and African Integration of Togo.

Indeed, the institutions are increasingly struggling to find specific funding for infrastructure in regional and international markets. In view of this, capacity building of public institutions is required to negotiate directly with private investors for a winning-winning partnership. » To work with the private sector, we need capacity building of our institutions, especially our administrative services and ministries to participate effectively in the implementation of this infrastructure as the private partner does not come for our beautiful eyes but rather to look for money. So we should be well-prepared to discuss directly with him, » said Jean Claude Afonzack, in charge of transport at the Economic Community of Central Africa States (ECCAS). 

Redefining new curricula 

For effective implementation of the African Union 2063 vision, innovative financing mechanisms were discussed. This will also enable African States to create jobs. But before raising that point, the participants unanimously agreed on the need to redefine new curricula. « We have resources to finance the development of infrastructure, but we do not release additional or integrated funding to precisely take into account the issue of employability of people expected to work in the new sectors generated by this infrastructure, » said, regretfully, Jean Claude Kouamé, the Ivorian Minister of Employment and Social Protection, also Economist specializing in maritime transport and transit.

« As the private sector builds infrastructure, it must also invest more in financing what can first guarantee the implementation of this infrastructure by the beneficiary countries and also the maintenance of this infrastructure by the citizens. Unfortunately, we believe that the current training is not tailored to meet the needs of the infrastructure market. »

Promoting land finance 

SMEs/SMIs must also play a role in infrastructure financing. As the Africans have land, the speakers expressed the fact that the States should now focus on the establishment of land registry numbers to raise project financing resources. « It is urgent to facilitate procedures for the allocation of land registry numbers in African States, because an economic operator in the construction industry can use his large land as a mortgage to the financing institutions, » said Honyiglo Pascal, a Beninese economic operator.

A few recommendations were made to this effect to include the financing issue to be discussed during the forthcoming African Union Summit of Heads of State and Government, for the poor electricity, water, roads and ICT infrastructure costs each African country two growth points each year and reduces productivity by 40%.

As a reminder, according to the Infrastructure Development Program in Africa, the financing needs for priority infrastructure over the period 2012-2020 are estimated at $ 68 billion.

Author: Blamé Ekoué // Photos: Prime Minister of Togo, at the AU opening roundtable © Blamé Ekoué