African business, politics and lifestyle
Time to build Africa?
Where once African officials might have viewed infrastructure projects solely as a good source of kickbacks, these days there is pressure from electorates, at least in some countries, to deliver on promises of improvements.
The growth that many African states have enjoyed in recent years has exposed the failure of the continent’s infrastructure still more starkly – with even South Africa suffering the kind of power outages that much of the rest of Africa has grown far too used to.
The global financial crisis is an even bigger threat to hopes of strengthening Africa’s infrastructure.
Last year, Kenya, Tanzania and Uganda all set out to borrow money internationally through sovereign bonds, for the upgrade and expansion of roads, water supplies, irrigation schemes and electricity generation capacities. That followed Ghana’s successful launch in 2007 of sub-Saharan Africa’s first Eurobond outside South Africa to help fund infrastructure development.
But the plans of the east African countries have been knocked off course despite early assertions from confident governments that they would not be affected by the global downturn which began in the Western world.
Kenya is exploring alternative ways of raising the $500 million it had originally planned to raise from a debut Eurobond. Tanzania and Uganda both made similar announcements.
But the problem of poor infrastructure remains as pressing as ever and could restrict growth in Africa once the current global financial storm ends.
A senior World Bank official has said Africa risks a “lost decade” of underdevelopment if it neglects projects to boost energy and transport infrastructure because of the global financial crisis – comparing the situation they face now to that in Asian countries a decade ago.
How much of a priority should infrastructure be for African governments at this time? Is there anything they can do to raise the money needed? What do you think?