Infrastructure spend across Africa will grow from $70
billion in 2014 to $180 billion per annum by 2025 on the back of
demographic boom and fast-paced urbanisation among other growth drivers,
a report by PricewaterhouseCoopers (PWC) has revealed.
According to the PWC report Africa has been identified as a
greenfield and the continent’s infrastructure growth story tells of an
opportunity-filled future for infrastructure development, especially in Sub-Saharan Africa.
“While the continent’s infrastructure
currently lags well behind that of the rest of the world, with some in a
30 percent dilapidated condition”, the report notes, “there is
widespread recognition of the vast business opportunities on the
continent, as a growing consumer market, as well as the vast
opportunities for infrastructure investment and development.”
At a media presentation of the report
titled, ‘Capital Projects & infrastructure in East Africa, Southern
Africa and West Africa: Trends, Challenges and Future Outlook’, Ian
Aruofor, PwC’s Capital Projects and Infrastructure (CP&I) West
Market leader, pointed out that West Africa was one of the most
attractive destinations for investors in infrastructure.
“The region’s growing population and its
wealth of natural resources are the foundation for sustainable economic
growth. It is clearly evident that sustaining West Africa’s impressive
economic growth profile requires vast investment in enabling
infrastructure.
“Improving governance, institutional
reforms, trade, technology and an empowered workforce lend credibility
to West Africa’s growth story”, Aruofor said.
According to him, South Africa and
Nigeria had the most ambitious infrastructure programmes and together
made up almost 60 percent of the spend across Sub-Saharan Africa, while Kenya followed as the third largest in planned spend.
“As with most of Sub-Saharan Africa,
energy is a focal area for investments in West Africa, as the region
remains in the grip of a prolonged power crisis”, he added.
Jonathan Cawood, CP&I Leader for PwC
Africa, explained at the media presentation that the shallow economic
recovery in most developed markets had shifted focus to faster-growing
regions.
“This is also true for the infrastructure
development sector. With an abundance of natural resources and recent
mineral, oil and gas discoveries, demographic and political shifts, and a
more investor-friendly environment, the investor spotlight shines
brightly on Africa,” Cawood noted.
While the recent shifts in oil price,
currency and internal security challenges might impact in the short
term, he argued, “the fundamentals for growth have not changed, hence we
believe the outlook for infrastructure development and economic growth
remains positive.”
In Nigeria, infrastructure challenges are
enormous, and according to the PWC Report, these challenges were not
Nigeria-specific. The report listed some of them as availability of
funding, political risk and government interference, which account for
about 59 percent of the challenges.
Aruofor hopes however, that “resolving
these identified challenges quickly and creatively will not only
positively affect the outcome of current projects, but more importantly,
attract other project developers, owners and investors to enter the
African market.”
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