M a r k e t N e w s

DP World Creates 5-Point Africa Plan

Posted on : Tuesday, 2nd February 2016

 A five point plan to help tackle Africa’s infrastructure gap is among the findings of a new DP World report unveiled at the Africa Global Business Forum.

 
Public private partnerships, domestic bond financing, monitoring the life cycle of infrastructure by maintaining and upgrading existing stock, enhanced trade integration and improved trade facilitation are key points raised in the study ‘Africa At The Crossroads: Bridging The Infrastructure Gap’ produced in association with the Economist Intelligence Unit.
 
Over the past decade, investment in African infrastructure has risen sharply and some notable projects have been completed. But despite the impressive flow of projects and policy reforms, the continent’s infrastructure development has failed to keep up with the average annual GDP growth of 5%.
 
The development of “soft” infrastructure, such as the legal and regulatory frameworks that enable physical infrastructure to be built and maintained, has also fallen short of requirements.  
 
The report traces the continent’s strong economic growth in recent years and highlights how infrastructure development has not kept pace, placing an increasing strain on existing infrastructure assets.
 
To overcome infrastructure deficits on the continent, as much as US$93 billion will be required annually (approximately 10% of African GDP), with only half of that amount currently available, the report explains.
 
DP World Chairman HE Sultan Ahmed Bin Sulayem said: “African countries need a solid foundation on which to place the building blocks of their economies. Both soft and hard infrastructure is needed, which will determine how quickly physical assets are built and how quickly trade develops.
 
“Our ports in Africa have shown us how the region has enjoyed strong growth over the last 10 years, leading to rising incomes, falling poverty and a step toward economic diversification. However, all this has also placed an increasing strain on existing inland and marine infrastructure.
 
“If Africa’s countries and regions were better connected, market sizes would increase and encourage greater foreign investment.”
 
Yet while Sub-Saharan Africa currently spends around US $6.8 billion per year on paving roads, this figure needs to be closer to US $10 billion according to DP World.
 
Victor Akpanika, CEO of the Port Notel Project in Nigeria, said of the DP World report: "The DP World report is very true regarding the challenges confronting African port development.
 
"The solution for West Africa is to develop an efficient and reliable intermodal transport network system, through a Public Private Partnership, which is the main thrust of the vision of Port Notel Ocean Terminal (PNOT).
 
"The PNOT-Port Master Plan Engineering Design provides for rail, highway, and pipeline networks, and an Airport facility - as a mega Industrial port complex to connect the hinterland.
 
"Hence our commitment to search, engage and collaborate with development partners involved in heavy industries... as co-investors, financiers and off-takers for this industrial deep sea port project."
 
The International Centre for Trade and Sustainable Development estimates that between 60% and 90% of trade costs in Africa relate to non-tariff obstructions such as slow processes, bureaucracy and corruption. Delays and unpredictability also reduce regional participation in global value chains because such industries require ‘just-in-time’ production which needs reliability.
 
Integration varies across the continent and the East Africa Community (EAC) is one of the better integrated regions. Here, Uganda’s role, as a trading hub linking Mombasa and Dar es Salaam with their hinterland, is growing. Despite successes, trade is still hampered by restrictive sanitary measures, price controls and arbitrary rules of origin, although the EAC are trying to solve these problems.
 
West Africa, on the other hand, is less well-connected. This is partly due to division between countries which speak French and those which speak English. Also conflict and instability has reduced political will to integrate. On top of this, several countries like Liberia, the Gambia and Sierra Leone, are very poor.
 
The report added that once infrastructure is built, it is often inadequately maintained leading to the poor quality of many roads and railways.
 
On the plus side, infrastructure is growing, although not as fast as it should be. Africa’s road network has been growing by an average of 7,500km a year since 2005, according to the African Development Bank.

Source : www.porttechnology.org
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