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INFRASTRUCTURE DEVELOPMENT AS CATALYSTFOR ECONOMIC GROWTH IN AFRICA

Thematic Paper jointly prepared by AU Commission and NEPAD AgencyAt the 17th Africa Partnership Forum (APF)

Addis Ababa, Ethiopia16 November 2011

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INFRASTRUCTURE DEVELOPMENT AS CATALYSTFOR ECONOMIC GROWTH IN AFRICA

Thematic Paper presented at 17th APF

Introduction and Context

Utmost importance is accorded to infrastructure as the foundation for growth and

development in Africa. The structural gap in African infrastructure is considered a serious

handicap to growth and poverty reduction. At the micro-level, it is recognized that

infrastructure investment enhances private sector activities by lowering the cost of production

and opening new markets, presenting new production opportunities and trade. Equally, the

strong linkages between infrastructure investment and the key indicators of social wellbeing,

such as health care, water and sanitation, housing, human capital accumulation and

electrification, are essential to address poverty challenges, MDGs attainment and advancing

the growth potential in Africa.

Linkages between Economic Growth and Infrastructure Development

The relationship between the economy and infrastructure is evidently critical to promoting

inclusive growth and sustainable development. In fact, high cost of transport, energy and

internet access is a major economic growth deflator and is partly associated the Africas

continued economic marginalization. This has compelled governments to upscale

infrastructure for Africa to become more competitive in the global marketplace. Investments

in roads reduce transport costs while ports and other logistics infrastructure reduce the cost

associated with trade, all of which improve the competitiveness of firms.

Infrastructure development supports various kinds of economic activity, including as an input

into production and also raises the marginal product of other capital used in the production

process. This linkage between the economy and infrastructure is multi-dimensional in the

sense that, economic growth provides both the need for, and the resources to fund, various

types of infrastructure. Provided that infrastructure projects take place in response to

appropriate cost-benefit analyses, such projects promote GDP growth. Alternatively, the

failure to provide appropriate infrastructure services may hamper GDP growth by creating

bottlenecks and hence opportunities for promoting economic growth could be inhibited.

Since the turn of the Millennium, Africa has been growing at a relatively fast rate by worldstandards until its growth path was interrupted by the global financial and economic crisis. An

economys infrastructure stock is usually developed in phases and it tends to increase as the

economy grows. However, the growth rates of individual measures of infrastructure could

fluctuate substantially over time, and in some cases even turning negative due to

depreciation exceeding the accumulation of stocks. The historical pattern of infrastructure

development differs substantially between sectors. Therefore, providing the right type of

infrastructure at the right time will be an important dimension of Africas continued economic

development. This requires policymakers to focus on encouraging development of the right

type of infrastructure at the right time. As an output and input into production, the need for

investment in infrastructure is paramount to Africas reform agenda. The continued need for

appropriate infrastructure investment is recognized in development planning from the

municipal to national and regional levels.

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AU-NEPAD paradigm shift towards Infrastructure development

Concerted efforts are now being made to promote national and regional infrastructure

development. In principle, Africa is moving ahead to systematically involve the private sector

in the development, operations and maintenance of infrastructure. Despite these efforts, the

infrastructure deficit remains a great concern given the slow and uneven pace. While policyand regulatory reforms at the country level are on track, low implementation of infrastructure

projects remains a constraint to growth actualization and MDGs attainment. By almost all

major infrastructure parameters, most African countries still lag behind the average for other

low-income countries.

New Partnership for Africas Development (NEPAD) as the flagship development programme

of the African Union identifies infrastructure as a key sectoral priority. Africa has prioritized

increased investment both in maintenance and in new infrastructure, new regulatory

frameworks, and the promotion of public-private partnerships (PPPs). The AU Commission

developed the AU Infrastructure Master Plans while NEPAD developed the Short-TermAction Plan for Infrastructure (STAP) and the Medium-Long Term Strategic Framework

(MLSTF) designed to accelerate progress in this sector. Successive AU processes at

Summit and Ministerial level have underlined the importance of infrastructure to economic

growth. Infrastructure Investment is vital ingredient for private sector development.

More importantly, recognising the gravity of the situation and the opportunities it presents in

terms of options for investment, the reform agenda in Africa is taking considerable action on

infrastructure targeting increased investment through the promotion of PPPs; regional

development corridors and power pools; bridging the digital divide through investment in ICT;

diversifying energy sources and addressing shortages; while ensuring sustainable access to

safe and adequate clean water supply and sanitation.

Although the importance of infrastructure investment at the micro and macro-level is clear,

over the last decade, infrastructure investment in developing countries, including African

countries, has fallen significantly, driven by declining public and private investment. In Africa

- where there are tremendous needs - average public sector investment in infrastructure is

currently only ranging between 2 to 3 percent of Gross Domestic Product.

The infrastructure deficit is most evident in low-income countries and fragile states. Among

the poor sectors, the power sector is lagging most in terms of generation capacity, electricity

consumption and security of supply. The deficit is holding back per-capita growth by 2

percentage points each year. As a consequence of this under-investment in infrastructure,

most countries now face the challenge of bridging huge infrastructure gaps that threaten

growth and the achievement of social and other broader development goals. Studies show

that Africas poor growth performance is related to underinvestment in electricity and telecom

infrastructure.

Infrastructure Development Challenges in Africa

In Africa, it has been estimated that closing the infrastructure gap to sustain 7% growth rate

by 2015 would require approximately US$93 billion a year, split two to one betweeninvestment and maintenance over the next decade. Half of this need, about USD45 billion, is

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currently being met but USD 17- 20 billion, about half of the gap, could be found through

improved efficiency. This includes putting in place good policy, legal and regulatory

frameworks, improving the performance of state-owned enterprises, and the maintenance of

existing infrastructure.

Box 1: Status Quo of Africas Infrastructure

Less than 10% (in 10 countries) and less than 50% (in 33 countries) of roads in Africa are paved. 40% of the population lacks access to safe water. 60% of the population lacks basic sanitation. Only 30% of the rural population in Sub-Saharan Africa has access to all-season roads. Transport costs in Africa are among the highest in the world; Only 30 percent of African population have access to electricity; Africa has the lowest telephone penetration 14% (the world average is 52%). Africa has the lowest Internet penetration 3% (the world average is 14%).Source: Development Research Brief, AfDB, 2009.

The remaining financing gap is thus estimated at USD 20-31 billion per year. There are

several plausible reasons why infrastructure investments in Africa are low. First, some

infrastructure investments have the characteristics of public goods (non-exhaustive and non-exclusive in consumption) which give the private sector very little incentive to invest.

Furthermore, private sector participation may be limited by the lack of stable long-term

finance, high sector-specific risk as well as high macro-risk arising from political instability

and poor governance. In addition, fiscal constraints may limit the ability of the public sector to

provide infrastructure investment.

Other factors that have contributed to limited infrastructure development in the continent

include;

Lack of a national infrastructure development framework in many countries,

Lack of detailed and reliable data to help determine financing gaps for infrastructureinvestment, rehabilitation and maintenance, AU-NEPAD regional projects are not sufficiently prioritized in country budgets, Lack of resources for upstream project preparation, and Lack of clear national ownership of regional projects, making project preparation more

challenging

The onset of the global financial crisis and its continuing consequences, is already affecting

Africa and creating new challenges, as investments and new expenditures are cut. The real

task ahead is to lay the groundwork for the continent to benefit from the recovery that has

started. One way is to ensure that Africas infrastructure programs are kept on track by

scaling up financing for new projects and projects under distress in order to stimulate growth.In addition, efforts towards maintaining a strong pipeline of projects and preserving existing

assets during the downturn mitigates against the effects of the downturn.

Over the years, Infrastructure has become an important binding constraint on growth in many

African countries. This has reignited the attention of the international community on the

importance of infrastructure financing and its impact on development in Africa. In 2008,

infrastructure investments (grants and loans) accounted for approximately 44.5% (UA 1.41

billion) of the African Development Banks portfolio. Transport accounted for the largest

portion (45.4 percent), followed by power supply (37.8 percent) and other infrastructure (16.8

percent).

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Indeed, Africa will devote more attention to raising domestic resources for its own

development while calling for support from development partners to fund new initiatives such

as the African Integration Facility and Africa Integration Fund under the umbrella of the AU.

Finding innovative ways to finance development in Africa, particularly high-capital outlay

infrastructure projects will benefit from both domestic resources and initiatives in

collaboration with development partners.

Enhancing Investment in Infrastructure - African Reforms and Initiatives

Undoubtedly, many African countries are making steady and remarkable progress in political

and socio-economic reforms, with the development landscape changing positively. This

change is in terms of improvement in good governance, better conflict management systems

and peace, stability and security. Alongside political governance, good progress is being

made in the Continent through sound and pro-market economic and corporate governance

including public financial management. Notably, this has led to marked improvements in

budgetary management, tax systems, reduction in costs of doing business, support services

for policy coordination, contract enforcement, public sector accountability and transparency,as well as, a more conducive environment for private investment and growth.

Over the past years, a record number of governments in Africa changed their economys

regulatory environment to make it easier for domestic firms to start up and operate. In a

region where relatively little attention was paid to the regulatory environment only 8 years

ago, regulatory reforms making it easier to do business were implemented in 36 of 46

economies between June 2010 and May 2011. That represents 78% of economies in the

region, compared with an average of 56% over the previous 6 years - a record number since

2005. This is good news for entrepreneurs in the region; where starting and running a

business is still costlier and more complex than in any other region of the world.

Furthermore, Africa is noted as one of the fastest-growing markets for mobile

communication, on a global scale. Between 2002 and 2008, the number of mobile phone

subscribers increased from 43 per 1000 to 375 per 1000, and it is estimated that 91% of the

urban African population have access to mobile voice services. Thus, private sector

participation in the infrastructure sector has improved greatly compared to the 1990s with

record highest in the mobile phone subsector. In recognition of investment opportunities in

infrastructure, a leading international investment research and communications group - Africa

investor (Ai), has instituted the Infrastructure Investment Awards on an annual basis.

According to Ai, African infrastructure is now well established as a competitive investable

asset class, with approximately US $4.435 billion of projects funded in the first half of 2011

alone, which increases significantly on the 2010 figures of $3.04bn.

In fact, four (4) African countries (Morocco, Cape Verde, Sierra Leone, and Burundi) are

amongst the economies that improved the most in the ease of doing business in 2010/11 -

with improvements in 3 or more areas of regulation measured by Doing Business. A

significant number of other countries in the continent have also recorded improvements in

their business climate. The figure below shows the significant increase in the number of

African economies with reforms for a better business environment. Thus, a fundamental

premise of Doing Business is that economic activity is based on transparent rules and

regulations that are efficient, striking a balance between safeguarding the business

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environment and avoiding distortions that impose unreasonable costs on businesses. The

result is mixed, and a lot still needs to be done to meet continental development goals.

In consequence to these reforms, investment opportunities are expanding in relatively fast-

growing sectors as telecommunications, banking, agriculture, roads and mass transit

infrastructure, energy and consumer goods. This is a great potential for lasting growth,

wealth creation and prosperity on the continent.

The 2008 World Bank Africa Infrastructure Country Infrastructure Diagnostic(AICD)1

study reflects that infrastructure accounts for a large share of Africas recent growth

performance, and could contribute much more, despite the slow progress being recorded. It

further notes that infrastructure services are twice as expensive in Africa as elsewhere and

indicates that Africa would require approximately US$93 billion a year, split two to one

between investment and maintenance. AICD discloses that Africa already spends US$45

billion, half the required amount, therefore through efficiency gains an additional US$17

billion could be raised from existing envelope. Even then, an annual funding gap of $31

billion would remain.

Programme for Infrastructure Development in Africa (PIDA)

Realizing that African economies are relatively small to generate economies of scale

required to foster regional trade and investment, a number of multi-country infrastructure

initiatives to accelerate economic growth2 have been instituted. African leaders adopted the

Programme for Infrastructure Development in Africa (PIDA) as the integrated continent-wide

vision, strategic framework and agenda for infrastructure development. When finalized, PIDA

will serve as the implementation strategy with priority action and phases for African

infrastructure. PIDA is a follow up to various initiatives including the AU Master Plan forInfrastructure3; 2002 NEPAD Short-Term Action Plan (STAP)4, NEPAD Infrastructure Project

Preparation Facility (IPPF) housed at the AfDB; and the AU-NEPAD African Action Plan

(AAP): 2010-20155

PIDA is an initiative jointly led by the African Union Commission (AUC), the NEPAD Planning

and Coordinating Agency (NPCA) and the African Development Bank (ADB). The PIDA is a

merger of the AUC Master Plan Studies/Continental Policy initiatives and the NEPAD

Medium to Long Term Strategic Framework (MLTSF) study.

. This is in addition to Infrastructure Consortium for Africa (ICA), which

has been successful to a great measure, in mobilising domestic, international and private

resources for infrastructure development, with the support of G8 member countries and other

partners.

The NEPAD MLTSF Study financed by the ADF and the AUC Master Plans and Continental

Policy Initiatives financed with EU funds granted to the AU, were restructured and merged

into one Programme in February 2008 by the AUC, NPCA and the ADB. These two initiatives

1 Africa Infrastructure Country Diagnostic study of the World Bank, 2008 was an unprecedented knowledge program on Africasinfrastructure that grew out of the pledge by the G8 Summit of 2005 at Gleneagles to substantially increase ODA assistance toAfrica, particularly to the infrastructure sector, and the subsequent setup of ICA2 Project implementation review of the NEPAD Infrastructure STAP Third review, July 20103 The AUC Master Plan and along with NEPAD STAP, have been integrated into the continental framework of PIDA whichstudy is expected to be completed in 20124 120 projects through RECs, broadly classified into 4 project types: facilitation, capacity building, investment and studies5 AAP designed by AU-NEPAD with technical support of AfDB and UNECA, is a defining tool to fast-track regional andcontinental integration including actualization of MDGs through mobilizing resources for African priority sectors especiallyregional infrastructure and harmonizing AU-NEPAD

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PIDA Milestones

- Building consensus on one African Agenda for Infrastructure- Set up of the PIDA Governance structure and Project Management Team along

with the Panel of Experts;- Mobilization of PIDA sector studies financing with support from Partners

- Approval of consortium of contracting firms; and start sectors studies - May 2010;- Official launching (15th AU Summit, Kampala, Uganda in July 2010);- PIDA Private Sector Stakeholder engagement Workshop;

The Presidential Infrastructure Champion Initiative (PICI)

To help catalyze policy and implementation action in Africas infrastructure sector, the

Presidential Infrastructure Champion Initiative (PICI) was adopted in January 2011 by the

16th AU Summit as a key landmark. The Initiative focuses on the political championing and

sponsoring of specific regional infrastructure projects with potential impact on economic

integration. The Presidential Infrastructure Champion Initiative was established under theumbrella of the AU and NEPAD. This high-level initiative, based on PIDA and AAP, focuses

on sponsoring catalytic regional infrastructure projects, through political leadership and

championing. Significantly, this provides a much needed platform to mobilize domestic and

foreign resources for development impact

Accordingly, identified African leaders acting as champions, will bring visibility to the

infrastructure projects, facilitate the unblocking of bottlenecks and any political impasse,

provide leadership in resource mobilization for the projects, and subsequently, the

champions will support and ensure speedy project implementation, and through a progress

reporting mechanism at the NEPAD Orientation Committee Summits, provide regular status

reports on each selected project.

The approved regional infrastructure projects endorsed by 16 th AU Summit covering the five

(5) regions of the AU with the country champions are:

a. Missing links of Algiers to Lagos Trans-Saharan Highway and Optic Fibre project Algiersto Abuja Algeria

b. Dakar-Ndjemena-Djibouti Road and Rail project - Senegalc. North-South Corridor Road and Rail project - South Africad. Kinshasa-Brazzaville Road and Rail project - Republic of Congoe. Water management, river and rail transport projects Egypt

f. Nigeria-Algeria gas pipeline Nigeria; andg. ICT Cross-border Broadband and link to fibre optic project on a continental basis

Rwanda

PICI is further testimony to African leaders commitment and political will to continue to drive

the growth of the infrastructure sector. Likewise, the recently approved Institutional

Architecture for Infrastructure Development in Africa (IAIDA) by the AU will go a long way in

delineating roles and responsibilities to facilitate the implementation of multi-country

infrastructure projects.

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Box : Status of Identified Infrastructure Projects under PICI

Missing Link of the Trans-Sahara Algeria: A 200 Km missing link from Assamaka(border with Algeria) to Arlit in Niger. Total construction cost is US$100 million which isalready committed by various lending institutions, while Niger Government required toprovide US$8 million. Construction is scheduled to start in 2013.

Optic Fibre from Algeria via Niger to Nigeria Algeria: A 4,500Km terrestrial fibre opticcable from Algiers (2,700Km) via Niger (950Km) to Nigeria (850Km). A joint Declaration wassigned by the three countries in June 2010. Financing for Algeria segment is already inplace, and project due to start in 2012, with completion and commercialization in 2013.

Dakar-Ndjamena-Djibouti Road/Rail Senegal: A combination of Trans-African Highway5 (Dakar to Ndjamena) and 6 (Ndjamena to Djibouti) totaling 8,715Km. Feasibility study isongoing and due to be completed by 2011 end. Based on interim report, 1,276Km constituteroad missing links on Ndjamena-Djibouti corridor. The rail missing link along the entireDakar-Ndjamena-Djibouti corridor is on average 3871Km. The Pre-Feasibility studies will becompleted by the end of 2011.

Nigeria Algeria Gas Pipeline Nigeria:A 4,300Km of natural gas pipeline from Nigeria toAlgeria via Niger. Feasibility study completed in 2006. In 2009, NNPC (Nigeria) andSonatrach (Algeria) agreed to proceed with a draft MOU between the 3 states and Jointventure agreement. The pipeline is expected to be operational by 2015.

Kinshasa-Brazzaville Bridge Road/Rail Republic of Congo: The construction of a fixedcrossing linking Kinshasa and Brazzaville (DRC and Republic of Congo) ensuring continuityin railway and road traffic to the eastern border of DRC and beyond facilitating railway androad interconnections in Central, Eastern and Southern Africa. The feasibility for the roadsection started in May 2011 while that of the Rail started in June 2011. Both studies shouldbe completed in 2012.

ICT Broadband and Fibre Optic network linking neighboring states Rwanda: Ascanning is being conducted by Rwanda to identify fibre optic and ICT broadband projects inthe region that require political unblocking for implementation.

North South Corridor Rail/Road South Africa: Review of all studies conducted withinthe North/South corridor has been undertaken to clearly identify implementation challengesof key projects in the corridor, and most importantly, to prioritize the road and rail projects.

Water Management, River and Rail Transport Egypt: Projects will be defined relating topromote better management of trans-boundary water resources.

African leaders have underscored the necessity for continuous engagement with relevantcountries, regional bodies, pan-African institutions and the private sector on taking forward

the identified projects. It is our expectation that the implementation of these infrastructure

projects will generate high impact and result in accelerating regional infrastructure

development in Africa.

Partnering for Infrastructure Development

Through the African Union and its NEPAD Programme, African leaders motivated by the

common desire to promote an African-led and owned development agenda, pursued a value-

driven partnership premised on selected sector priorities with infrastructure as a core target.

At Monterrey in March 2002, developed and developing countries agreed that improved

infrastructure was essential for sustained economic growth, poverty eradication and

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employment creation. The global commitment further underlines the need for both public and

private investment in infrastructure.

There is a renewed impetus given to regional infrastructure by PIDA through the NEPAD-

OECD Africa Investment Initiative. At its 5th Ministerial Session in Dakar in April 2011, the

Initiative called on regional and international organisations to work with African governments

on a demand driven basis to assess, diagnose and address institutional, regulatory, policyand public sector capacity bottlenecks that hamper infrastructure investment.

The growing demand for infrastructure has led to collective initiatives to support African

efforts. The Commission for Africa and the Gleneagles G8 Summit underscored the

importance of investing in infrastructure in Africa leading to the set up of the Infrastructure

Consortium for Africa (ICA). The Consortium is based at the African Development Bank,

with multilateral and bilateral partners contributing resources towards African-led

infrastructure initiatives at the country and cross-border levels.

Specifically, ICA focuses on aid effectiveness and improving coordination among partners,creating advocacy and awareness to scale up efforts, develop better data and monitor

resources on the current state of service provision, and improve the capacity of local

governments and service providers to increase the overall impact of the efforts. The

Infrastructure Consortium for Africa is a strong signal that donors recognize that going

forward maximizing aid effectiveness will require increased donor harmonization and co-

financing around country infrastructure programs geared towards clear outcomes.

A number of initiatives also worth highlighting include the Aid for investment in

infrastructure project jointly implemented by the OECD Development Assistance and

Investment Committees and in collaboration with ICA is aimed at improving the enablingenvironment for infrastructure investment in Africa. It also targets interventions to strengthen

regulatory frameworks of infrastructure investment, improving risk management, and

capacity building for Public-Private Partnerships (PPPs).

More recently, at the 5th Ministerial Conference of the NEPAD-OECD Africa Investment

Initiative, held in Dakar on 26-27 April 2011, the international calls for a new development

paradigm recognizing the role that investment policy and private capital flows can play to

stimulate growth and alleviate poverty were recognised. Though acknowledging the

progress achieved by African governments in reforming their economies and the need to

sustain the continents reform agenda; delegated were convinced that additional structural

reforms targeting further improvement of the investment climate are essential to further

enhance domestic and foreign investment, particularly in the infrastructure and agricultural

sectors as well as in the green economy. This reinforced the compelling case for the

international community to continue its support for Africas reform agenda, as a step forward

in implementing the 2002 Monterrey Consensus on Financing for Development.

Furthermore, the Investment Climate Facility (ICF) for Africa is another African initiative

that is doing considerable work in improving the general investment climate in the continent.

ICF is a demand-driven organisation with the architecture of unique and unprecedented

partnerships between governments, private companies and development partners,

exclusively focused on providing tangible improvements to Africas investment climate.There is a growing interest in the services of this facility, year-on-year.

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In 2010, ICF forged new partnerships with a number of African governments, as well as

strengthening engagements with existing partners. ICF now collaborate with 13 African

governments and a number of regional organisations. ICF operates in a country or region if it

is evident that the conditions for successful improvement are optimal, and that includes the

presence of high-level government support and the proactive engagement of the private

sector. ICF has therefore identified key priority areas that are believed to have maximumimpact on the investment climate. These include: property rights and contract enforcement;

Financial markets; Infrastructure facilitation; labour markets and competition.

Private Investment in Infrastructure

African countries have made considerable progress in promoting more stable economic

environments, and hence more predictable business climate. Recognising that, project

selection is driven by commercial interest in the private sector, the AU calls for private

investment in infrastructure based on the following;

The African business environment is now more predictable and hence more favourable

for the financial viability of long term investment projects such as in infrastructure,

The demand risk is mainly controlled by governments which are more accountable and

ready and willing to go into partnership with the private sector,

Interest rate risk is minimal in the sense that public private partnerships are usually very

highly leveraged,

Funding and foreign currency risks have also been minimized through financial sector

liberalization, including the floating of exchange rates,

infrastructure has been prioritized in continental and national development programmes

and annual investment requirements to close the infrastructure gap is considerable, and

Continental development institutions and African development partners are capable and

willing to provide the support that may be needed in engaging governments for long term

investment.

Infrastructure investment is not only considered relatively safe, but also considered as a

counter-cyclical tool for governments. Therefore, governments will more than welcome such

investments. In addition, infrastructure investment could also be associated with potentially

high returns because there is low correlation with other classes of assets, revenues are

implicitly linked to inflation, cash flows are reasonably stable, and very importantly,

infrastructure projects involve monopolistic or quasi-monopolistic activities.

Conclusion

Although much has been done, a lot more still needs to be done for Africa to realize its full

potential through infrastructure development. Evidence shows that private sector intervention

has rebounded and non-traditional partners, particularly China, India, Brazil are playing an

increasingly larger role in supporting countries and regional bodies in infrastructure

development. However, adequate funding should be directed towards project preparation. It

is also necessary to sustain the recent trend of increasing investment in infrastructure.

African countries will continue the regulatory reform processes, accelerate cross-border

initiatives particularly under the umbrella of PIDA and enhance the capacity of AUC, NEPADAgency, RECs and other technical regional bodies to develop effective infrastructure for the

African economy.

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Overall, Africas renewal is a major agenda requiring the continued active support of the

international community. The strides being made by national governments, regional and

continental bodies in transforming Africa to a modern and growth-induced economy will be a

positive step for global prosperity. Certainly, the primary responsibility for infrastructure

development in Africa rests within it. However, an effective and inclusive partnership with the

international community including the private sector will support Africas commitment in this

regard and help realize the desired impact.

Key messages

The key messages to the 17th Africa Partnership Forum (APF):

Re-affirmation of Infrastructure development serving as the catalyst for economicgrowth in Africa;

Africa is open for business and it is timely to invest in African infrastructure to advancethe growth trajectory of the Continent;

Continued commitment of African governments to accelerate reforms to spurinfrastructure investment in the Continent is premised upon appropriate regulatoryframeworks for Africas private sector development and value-added investments;

From the African Union perspective, Infrastructure is the entry point to actualizingregional integration goals. Thus, it is most essential to support the strengthening ofRECs capacity towards developing and managing regional infrastructure projects andfast-tracking the harmonization of infrastructure related regulatory frameworks;

Call on development partners to accelerate support for African governments inidentifying and implementing additional reforms for growth and employment,particularly in the infrastructure sector;

Underscore the importance of development partners support for national andcontinental infrastructure initiatives particularly PIDA and the Presidential InfrastructureChampion Initiative (PICI), in addition to their existing support for the InvestmentClimate Facility, Infrastructure Consortium for Africa and Infrastructure ProjectPreparation Facility (IPPF);

Support for Aid for Investment in Infrastructure, promoted by NEPAD-OECD AfricaInvestment Initiative aimed at strengthening institutional capacity at national andregional levels on infrastructure financing and investment;

Promote increased procurement opportunities for domestic African enterprises and

engineering contracting firms while enhancing capacity within Africas public sectorinstitutions for infrastructure development and maintenance tasks;

Likewise, African governments are determined to develop requisite capacity at countrylevel to design and implement PPPs; and

Emphasis on developing public-private partnerships (PPPs) and encourage increasedjoint-venture project development between multinational firms and local Africanenterprises for infrastructure development.

African Union Commission andNEPAD AgencyOctober 2011

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References

Accelerating reform in Africa: investment in infrastructure and agriculture, Fifth Ministerial Conference, NEPAD-OECD Investment Initiative, 2011

Accountability report on Africa-G8 commitments: 2001-2010, AUC and NPCA

African Governance Report II 2009, UNECA

Assessing Africa-G8 Partnership Commitments: Accountability Report on Africa-G8 Commitments from 2001-2010 AU Commission and NEPAD Agency

Doing business in a more transparent world Doing Business 2012, World Band and IFC, 2011

Infrastructure development in Africa, Development Research Brief, AfDB, 2009

Infrastructure and Economic Growth in Sub Saharan Africa, Kamara, I. B., 2007

Making Africa a better place to do business, Annual report, ICF 2010

Sovereign Wealth Funds & infrastructure investment in Africa: Challenges and perspectives, NEPAD-OECDAfrica Investment Initiative (undated)