EY-africa-attractiveness-survey-june-2015-final

Future Assuring Africa’s long-term growthPrioritiesInfrastructuredevelopmentViewpointBridging theinfrastructure gapAnne KabagambeChief of Staff & Director of Cabinet,African Development BankUltimately, the success of regional integration willhinge upon the quality of Africa’s infrastructure.Good transport, power and communicationnetworks are essential to link markets, reducethe cost of delivering goods, help people movearound, remove productivity constraints, generateenough electricity to support the development ofmanufacturing and other industrial sectors, andenhance overall competitiveness of the region. TheAfrica Infrastructure Country Diagnostic, releasedin 2009, confirmed that Africa has the weakestinfrastructure in the world and needs investment ofUS$93b a year for a decade to close the gap withother developing regions. A more recent analysisby EY and the Infrastructure Consortium for Africa(ICA) showed that, with funds now available andprojects under way, the gap is being closed. 60 But wefound that work had yet to begin on implementingtwo-thirds of the projects. Africa needs to removebarriers to project completion, fast.At the African Development Bank, we believe thatwe have a US$50b annual infrastructure deficit. Thefinancial resources needed are well above what canbe financed from Oversea Development Aid flowsand other current development financial flows. Itrequires innovative financing instruments to channelthe required additional resources. It is also clearthat we cannot wait for somebody else to solvethis problem for us: we need African initiatives andAfrican solutions.The AfDB has deployed a variety of targetedapproaches to address specific investment gaps,as illustrated by various initiatives including theAfrica50 Fund, risk mitigation instruments and cofinancingfacilities. The AfDB also amended its creditpolicy, creating opportunities to increase accessof African Development Fund (ADF)-only countriesto the bank’s non-concessional resources, sinceits lending and risk-bearing capacity for sovereignoperations remains strong, where it is underexposed.Recognizing project preparation, prioritization anddesign as some of the main impediments to Africa’stransformation, a notable initiative by the AfDBhas been the establishment of the Africa50 Fund tofinance transformational infrastructure projects inAfrica, including a project preparation and projectfinance facility.60 EY’s 2013 Africa attractiveness survey: Getting down to business, EY, 2013. Bridging the Gap:Ensuring Execution on Large Infrastructure Projects in Africa, EY, 2014.Note: ICA members include the G8 countries, the World Bank Group, the African DevelopmentBank Group, the European Commission, the European Investment Bank and the DevelopmentBank of Southern Africa. Their reports are available at: www.icafrica.org.The key objective is tocreate viable, bankableprojects50EY’s attractiveness survey Africa 2015 Making choices