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Surge in spending on Africa’s transport infrastructure

Investment in new roads, bridges and railways across Africa is set to soar by 46% in the coming year, rising from US$47.1 billion in 2019 to US$69 billion in 2020, according to a new report by research company GlobalData.

Nigeria, Kenya and Egypt will be at the forefront of transport construction spending, the African Transport Networks report said.

There are currently 448 major transport projects at varying stages across the continent, which are worth US$430.3 billion.

When completed, these projects will result in 54,110 km of roads, 55,345 km of railway tracks, and 599 km of bridges.

The report highlights the importance of key transport networks, such as East Africa’s northern and central transport corridors spanning Tanzania, Kenya, Rwanda, Burundi, Ethiopia, the Democratic Republic of Congo, South Sudan, Sudan and Djibouti.

Another example is the Abidjan-Lagos corridor in West Africa, part of the trans-African highway of the Economic Community of West African States (ECOWAS) region.

“Chinese contractors are involved in road and railway projects that account for 21.3% of Africa’s project pipeline value,” the report said.

“Other main foreign contractors are headquartered in France (accounting for 17.7%), Turkey (accounting for 8.2%) and the UK (accounting for 3.4%).“

It added that “governments have paved the way for public private partnerships (PPPs) to fund a large proportion of projects in the pipeline.”

Around half (52.4%) of the total project pipeline by value is being driven by governments allocating public funds, with a third (33.3%) “funded by various joint financing arrangements between the public and private sector.”

Yasmine Ghozzi, an economist at GlobalData, said: “Africa’s lack of infrastructure is a serious obstacle to growth and development, resulting in a low level of intra-African trade and trade with other regions. The continent accounts for 12% of the world population, but generates a mere 1% of global GDP and only 2% of world trade.”

The March 2018 agreement to establish the African Continental Free Trade Area could be a “turning point in the continent’s ambition to boost intra-African trade and spur economic development,” Ghozzi said.

“With this emphasis on regional integration, the focus is on the development of regional economic corridors, particularly important for landlocked countries, interlinking highways, railways and ports in the region, hence providing connectivity between rural, national and international networks,” she added.

Source: CIPS – Supply Management

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