Large-scale investments in African infrastructure specifically in power, roads and broadband is what can put the continent on the path of double-digit growth, said eminent economist Jeffrey Sachs.
Sachs, who is the director of the Earth Institute at Columbia University, recommended an infrastructure-heavy plan for Africa to up its economic growth over the next decade. “There is no choice; Africa needs 10 per cent per year of economic growth over the next 15 years.”
In order to achieve this, Professor Sachs encouraged African economies to forge partnerships with East Asia, tap into capital markets and strengthen continental bodies such as the New Partnership for Africa’s Development (NEPAD) Agency and African Development Bank (AfDB).
The NEPAD Agency has identified Africa’s most important infrastructure needs within the context of the Programme for Infrastructure Development in Africa (PIDA), which provides the framework to implement 51 priority programmes and projects in the sectors of energy, transport, broadband and trans boundary water.
However, NEPAD Agency CEO Dr. Ibrahim Mayaki, noted that Africa’s challenge was not a lack of resources, but of bankable projects. “We need to invest in the capacity to invest. It is about proposing structured projects.”
Complementary instruments have been developed to build the necessary capacity for early-stage project preparation. The Africa50 Fund has also been set up to finance the implementation of PIDA and other regional infrastructure projects, said Mayaki. He also underscored the important role of Regional Economic Communities in providing the enabling environment for project implementation, through harmonised policies and regulatory frameworks.
But, Sachs noted that financial markets failed to translate pools of savings into productive investment. There was need to better match these large-scale resources with financing priorities of developing countries, he suggsted. “The world has the resources to do this. Allocating more of these resources to inclusive development would be good for the global economy.”
According to Professor Stiglitz, the best way for Africa to achieve its infrastructure goals was to tap into a Global Infrastructure Investment Platform (GIIP), whose objective was to put forward an ambitious proposal that would allow long-term investors to ramp up their infrastructure asset holdings, with an allocation target of up to 10 per cent of assets under management over a 15-year horizon.