Funding for Africa’s infrastructure grows by 22%, ICA shows as Africa Investment Forum opens
Funding commitments to Africa’s infrastructure development rose by 22% in 2017, the Infrastructure Consortium for Africa announced today.
Published on the first day of the Africa Investment Forum, the ICA’s Infrastructure Financing Trends in Africa 2017 report shows that commitments to develop Africa’s infrastructure increased to $81.6 billion in 2017 from US$66.9 billion in 2016.
The 2017 figure is the highest reported since 2010, and the ICA’s research shows that the main factors behind the growth include a $13 billion increase in identified Chinese commitments and a $3.7 billion increase in African government spending.
Mr Mike Salawou, ICA Coordinator and Manager, Infrastructure Partnerships, at the African Development Bank, commented: “Over the years the Infrastructure Financing Trends in Africa report has become an important document for presenting, in a consistent manner, how finance is being mobilised to develop the continent’s infrastructure.
“The report’s publication this year on the first day of the Africa Investment Forum is extremely timely. While the 22% increase in financial commitments in 2017 is very welcome, the report also serves to highlight the size of Africa’s infrastructure financing gap – an important issue that the forum will address,” Salawou said.
The report highlighted the following key findings from 2017:
Overall commitments to Africa’s infrastructure development, from all reported sources, rose 22% in 2017 to $81.6bn from $66.9bn in 2016;
Total African state spending on infrastructure, at both national and sub-national level, increased from $30.7bn in 2016 to $34.4bn in 2017;
Chinese investment jumped substantially in 2017, to $19.4bn from $6.4bn in 2016. Chinese funding has fluctuated substantially over recent years, with the 2016 figure of $6.4bn following a high of $20.9bn in 2015 and a low of $3.1bn in 2014;
ICA members reported commitments of $19.7bn to African infrastructure projects in 2017, an increase of 5% from the $18.6bn reported in 2016. This represents one of the highest commitments since the ICA began collecting data in 2010, only slightly below the 2015 high of $19.8bn;
Commitments to African infrastructure development by non-ICA members (bilateral and multilateral, excluding China) reached $5.8bn in 2017. Of this, the Arab Coordination Group committed $3bn, compared with $5.5bn in 2016 and $4.4bn in 2015;
The value of projects with private sector participation reaching financial close in 2017 totalled $5.2bn, an increase from the $3.6bn reported in 2016. Of this, $2.3bn (44.8%) was privately financed;
With commitments of $34bn, the transport sector continued to be the largest beneficiary of infrastructure commitments in 2017, accounting for nearly 42% of all funding. The energy sector, which recorded $24.8bn of investments in 2017, accounted for 30.4% of the total funding. The water sector accounted for $13.2bn (16.2%), followed by multi-sector investments, which registered $5.1bn (6.3%). Commitments to the ICT sector stood at $2.3bn (2.8%);
Of the $81.6bn committed to Africa’s infrastructure development in 2017, West Africa received $22bn of commitments, followed by North Africa with $15.9bn and East Africa with $15.8bn. Southern Africa (excluding South Africa) received $12.2bn, South Africa $8.7bn and Central Africa $6bn.
The inaugural Africa Investment Forum takes place from 7 to 9 November 2018 in Johannesburg, South Africa, offering a platform for sourcing funding for bankable African projects, brokering infrastructure deals and providing innovative financial solutions.
The event will attract key global companies, financial players, and public officials who will address the continent’s critical infrastructure investment gaps.
Infrastructure Financing Trends in Africa 2017 can be downloaded from the ICA website.
Infrastructure Financing Trends 2017
The ICA’s annual report on Infrastructure Financing Trends in Africa identifies how resources are being mobilised to make an impact on Africa’s infrastructure development. The report covers all sources of infrastructure financing – including multilateral and bilateral donors, African state spending, development banks and the private sector.
One of the issues addressed in the 2017 report is African state spending on infrastructure development. The methodology for collecting and compiling data on state spending for infrastructure has been improved for this report, enabling it to capture spending not only at a federal level but also at a sub-national level (e.g. by local governments and utilities) without the risk of double-counting.