Why Africa Talks So Much About Infrastructure
A study by the Infrastructure Consortium of Africa shows that poor infrastructure—roads, railways, harbors, etc.—adds 30-40% to the costs of goods traded among African countries.
For many years, the “grand bargain” in our development assistance for Africa is that we would work as true partners with African leaders to help countries there move from being aid recipients to partners to, one day, fellow donors. As I put it in my days as USAID Administrator, we would walk side by side with countries on their “journey to self-reliance.” At the heart of that approach was helping partner countries to become candidates for trade and private investment.
Part of what holds Africa back in its journey to self-reliance is that many countries there lack the reliable infrastructure that private investment often needs. An analysis by Deloitte shows that the lack of physical infrastructure in Sub-Saharan Africa is still keeping many investors at bay. Large commodity finds—such as oil, gas, iron ore, platinum, coal, and copper—are driving the need for infrastructure. Yet, at the same time, investment in infrastructure needed to extract and transport these commodities to the global market is also driving Africa’s economic growth. Reports published by the Infrastructure Consortium of Africa support Deloitte’s analysis.
The good news is that African leaders are increasingly aware of how infrastructure needs have been hindering their countries’—and people’s— progress, and they are striving to respond. In fact, infrastructure is the only subcategory in the Ibrahim 2022 Governance Report in which all 54 African countries have seen improvement since 2012.
As the Ibrahim Report notes, every African government has committed to improve infrastructure and therefore, they reason, their economies. Some believe Africa may be at the start of a 20 to 30 year infrastructure development boom.
With infrastructure about much more than roads and bridges, a significant portion of recent improvements come from the growth of digital infrastructure, including making mobile networks and the internet available to more people in more places. Africa is demographically the youngest continent, and its youthful population has been the driving force behind the accelerated growth of digital infrastructure across the continent. While there is still a very real “digital divide,” the African Union’s Digital Transformation Strategy shows that leaders across the continent understand the connection between the availability of digital technology and economic opportunities. So much so that African governments aim to have 800 million citizens online by 2030, and to create an internet economy potentially worth $180 million by 2025.
At the 2022 US-African Leaders Summit, the Biden-Harris administration announced the launch of an $800 million initiative. This effort is intended to spur economic recovery throughout Africa, with the three core pillars of Digital Economy and Infrastructure, Human Capital Development, and Digital Enabling Environment.
China, with its Digital Silk Road initiative, has invested in wireless networks, subsea cables, and satellites across Africa. Private companies such as Google with its Equiano subsea cable from Portugal to South Africa, are helping to bridge the $100 billion infrastructure deficit, and increase the affordability and speed of the internet for African countries.
There’s a lot of coverage of America’s trade and investment opportunities in Asia, perhaps because of all the attention paid to the “great power competition.” But six of the world’s fastest growing economies are in Africa. The continent is still in great need of investment and improvements in infrastructure—physical and digital—but there has undeniably been steady improvement in infrastructure across the continent over the last decade.
African leaders are striving to accelerate infrastructure improvements and are looking to both China and the West for assistance. As we read about nearly every day, China is answering their call. Are we?
This blog was researched and drafted with the assistance of Caroline Moody.