Africa is urbanising at a rapid pace, which means infrastructure such as bypasses, bridges, new highways and new tech- nologies needs to be deployed in congested areas where traditional methods cannot work, notes Africa-focused consultancy Africa House director Duncan Bonnett.
This evolution of infrastructure and the underlying drivers were highlighted at the Infrastructure Africa 2016 conference.
Companies need to develop a local presence and integrate strategies with the evolving economies and underpinning infrastruc- ture in the region. “A local presence does more than wave a flag: it demonstrates commitment to the future and it allows for in-country intel- ligence gathering and goodwill (and ultima- tely contracts) from project developers and government,” says Bonnett.
He notes that, in the face of growing international competition in sub-Saharan Africa, South Africa-based companies need to take a long- term strategic view of the region and determine how best to take advantage of the opportunities presented by the demographic, industrial and energy evolution that is taking place.
“Low commodity prices have tempered the desire of many companies to involve them- selves in Africa, but this is, arguably, the best time for those with longer-term ambitions to integrate their operations into key development nodes,” says Bonnett.
He explains that many businesses think of countries or regions in Africa as single-driver opportunities, which when buoyant, offer great short-term opportunities, but when depressed, signal the time to leave. But sub- Saharan Africa’s mining and energy belts that were initial drivers of development have opened up support infrastructure opportunities that offer growth prospects in the longer term.
For example, coal and infrastructure projects in Tete, Mozambique, have slowed, but there are agri-industrial and support infrastructure opportunities. There is also a much broader regional, national and subnational opportunity that is unfolding from Southern to East Africa, which is becoming an energy corridor, he adds.
Moreover, through the adoption of the United Nations Sustainable Development Goals – particularly in respect of industry, innovation and infrastructure – the international community has recognised the importance of inclusive and sustainable industrial development for economic growth as a result of its multiplier effect on all economic sectors, notes the Department of Trade and Industry (DTI) chief director Nigel Gwynne-Evans.
“Rarely has a country progressed and become developed without sustained structural transformation from an agrarian or resource-based economy towards a higher productive agriculture and a sophisticated industrial or service-based economy. Industry, by providing decent jobs and by expanding the fiscal revenues needed for social investments, can boost capacity for inclusive development,” says a 2015 report by the United Nations Industrial Development Organisation to the China G-20 Development Working Group.
Regionally, in the Southern African Development Community (SADC), the DTI and other regional organisations are looking at three main areas of growth: food and agroprocessing, mining and metals, and pharmaceuticals.
“These sectors cannot create jobs unless we achieve productive capability and the right environment with larger markets,” states Gwynne-Evans.
He adds that Africa is currently highly fragmented with small markets and small economies. “If we are able to build larger regional markets, through regional integration, then we could create regional trading blocs that have the economies of scale to catalyse industrialisation in various regions.”
This is the current focus of the regional economic communities such as the SADC, the Economic Community of West African States, and the East African Community, as well as recent initiatives to create a continentwide Free Trade Agreement.
In addition, he points out, this is the requirement for a dramatically upscaled focus on improved infrastructure of all forms, including road, rail, water and energy, to provide the conditions for growth.
Regional integration in building large-scale cross-border infrastructure that will unlock Africa’s industrialisation capabilities was one of the topics of discussion at the Infrastructure Africa 2016 conference.
2016 Infrastructure Africa Business Forum
The fifth Infrastructure Africa Business Forum on June 9 and 10, 2016, brought together pro- minent African infrastructure experts, government officials and business leaders to accele- rate the business of infrastructure develop- ment. The Africa Inclusive Infrastructure Forum (AIIF), a side event of the main conference, focussed on issues of gender in infrastructure development across the continent.
Infrastructure Africa partnered with the African Development Bank (AfDB) to host the AIIF at the Sandton Convention Centre.
The two-day conference and exhibition provided an opportunity for companies to focus on the continent’s growth hot spots, discuss infrastructure trends and meet project deve- lopers and relevant government authorities, while exploring infrastructure business opportunities.
The event had the highest level of African and South African endorsement for an infrastructure event on the continent, and provided the business platform for private- and public-sector players seeking to meet the sector’s national and regional business leaders.
The event partners are the New Economic Partnership for Africa’s Development Plan- ning and Coordinating Agency, the AfDB and the Development Bank of Southern Africa. There were also many corporate sponsors on board.