Poor infrastructure in the East African Community has hindered economic growth within the bloc.
The London Stock Exchange (LSE) listed firm revealed the investments in the infrastructure sector should reach $98.8 billion by the year 2022. The report forecasts the infrastructure construction determination by the East African Community (EAC) countries.
In their 2018/19 fiscal budget planning, Kenya and Tanzania, as well as Uganda, prioritized the infrastructure sector, an industry that has a high potential to woo potential business investments. Investments in the infrastructure industry should steer trade among the countries and add impetus to the economic outlook of their economies. The upgrade and construction of better transport networks should aid in the effective and efficient movement of both goods and people to and from their destinations.
The mega infrastructure projects underway in the East African region are deemed to create unique business opportunities as well as open new markets for the respective countries. Among the sectors to benefit from the projects include oil and gas (O&G) sector, mining, and agriculture, with the latter being the backbone of most East African economies.
“There are various factors that hinder infrastructure financing in East Africa, including higher transaction costs, inadequate availability of bankable projects, permits, and licenses required, as well as the multi-governmental agencies and institutions that investors must deal with in typical capital projects. There are also obstacles related to the limited local capacity for project preparation and tender,” he observed.
According to the 2018 edition of the African Economic Outlook (AEO), poor infrastructure within the region continues to rob the bloc various investment and economic growth opportunities. An area observed that crippled the ability of African countries to experience growth was the level of external debt which has skyrocketed between 2013 to 2016.