Africa’s infrastructure is in “critical need of investment” with private sector involvement being the key to strengthen it, says Richard Laing, CEO of the UK’s CDC Group.
Laing made this announcement in his speech at the 7th Africa Investment Forum in Accra, Ghana. He also outlined some of the ways African governments and regulators can attract private sector capital.
In his keynote speech to the forum, Laing noted that Africa lags far behind other emerging markets in terms of infrastructure investment: “Africa’s infrastructure requires around US$93bn a year, when you realise the current spend is less than half that at around US$45bn a year, you realise just how much scope there is for private sector investment and expertise”.
Sub-Saharan Africa lags behind all other low income countries on every measure of basic infrastructure provision, but it was the acute lack of investment in power infrastructure that Laing singled out.
The CEO noted Sub-Saharan Africa, with a population of 770 million people, generates less power than Norway, a country of less than 5 million people and the electrification rate in Sub-Saharan Africa is 26% versus an average rate of 68% in other emerging markets.
Laing went on to note that all sources of funds will be needed to fill Sub-Saharan Africa’s power investment deficit and that private sector investment, in many forms, can play an important role – including public private partnerships (PPP). With regard to PPPs, he explained that it was of paramount importance that African governments and regulators create conditions conducive to investment.
“According to the World Bank, inadequate infrastructure is holding back economic growth in Africa by two percentage points each year. Whilst some investment building blocks are missing, we are confident that with the necessary institutional improvements, African governments can have thriving partnerships with the private sector and, in doing so, can help to bridge Africa’s wide infrastructure gap,” Laing concluded.
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