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  • Writer's pictureInfrastructure Exchange

Africa Roads Action Plan

Dealing with Africa’s road infrastructure backlog remains high on the agenda for not only its leaders but also the worlds leading road construction and road infrastructure companies.

Taken as a whole, Africa’s road infrastructure lags well behind that of the rest of the world for example 34% rural access vs. 90% globally. Those highways that do exist are often in a dilapidated condition and massive backlogs in maintenance, repair and operations prevents the construction of much needed new corridors linking cities and countries.

Throughout Africa private companies are already making major road investments. Whether you’re in Senegal, landing in Namibia or driving through downtown VI in Lagos – there are many examples of improving road infrastructure. These have been critical in spurring Africa’s continued economic expansion. However, new projects continue to be hampered by an inadequate regulatory environment, a lack of coordination among state entities that results in delays. Yet the overriding problem with African road development remains an issue of finance and investment.

The ability for Africa to fund these projects on its own is limited. Competing priorities between government departments for limited funding means that most host governments outside of South Africa can simply not support most of the projects they want to get off the ground. Competing road projects compounds this problem for the industry. A key finding of our global Infrastructure Exchange Survey was that funding expected to go to road infrastructure is often syphoned off to other government departments with worrying regularity. When respondents to our survey were asked why, it was felt because it was political suicide to withdraw funding for schools and hospitals yet roads was “fair game” as one respondent put it.

So what can the road construction industry do, to ensure that road projects are top of the agenda. The Infrastructure Exchange sat down with our members from the investment community and created four key steps they felt would help them present their arguments to ensure the industry gets the funding it so desperately needs.

All stakeholders must align and create a common message of the benefits of world-class road infrastructure. This must be pan-regional and not be in silos characterised by countries, sub-sector specific(i.e. just traders or technology providers).

An engagement programme with DFIs that ensures investors are informed. They too have finite resources that have to be split across all infrastructure projects and regions (not just roads in Africa)

Foster a better understanding of how the investor gets paid, what they need to see in bankable projects that will allow road development to happen in Africa.

A solid education program for investors around the needs of the industry itself, and understanding of the technical complexities that happen at the ‘cold face’ of the road construction industry

Over the next decade, spending on the various road infrastructure projects is expected to continue growing, driven by a growing middle class the need in areas like East Africa to access the natural resources of the region and achieve the goals of economic development.

The 4th Africa Road Infrastructure & Investment Congress in Kenya in September 2019 looks to create an action plan of change, foster investor dialogue and ensure a platform that can tackle these four issues. We hope to see you there and like to hear from you. #ARIIC2019

The Infrastructure Exchange Team

#investment #EastAfrica #financing #roads

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