African transport infrastructure to see $69bn worth of investment by 2020

Continent aiming to boost intra-Africa trade and boost economic development

Investment in Africa’s transport infrastructure sector set to see significant growth by the year 2020, driven by a surge in funding for roads, bridges and railway projects, rising from the current figure of $47.1 billion to $69 billion by next year.

According to a report by GlobalData, a leading data and analytics company, the railway project spending will be led by Nigeria, Kenya and Egypt, where the transport investment will increase from $7.6 billion, $9.5 billion and $5.6 billion respectively, to $9.8 billion, $8.5 billion and $7.5 billion by next year.

When completed in their entirety, the tracked projects will total more than 110,000km in length (54,110km of roads, 55,345km for rail, and 599km for bridges, the Africa Transport Networks report said. Of this, 75,297km will be newly constructed, while 29,197km will be upgraded, and 5,561km will have an element of both construction and upgrade, it added.

The report is currently tracking 448 large-scale transport projects across Africa, worth $430.3 billion in both the public and private sectors, at all stages, from announcement to execution.

“Africa’s lack of infrastructure is a serious obstacle to growth and development, resulting in a low level of intra-African trade and trade with other regions. The continent accounts for 12% of the world population but generates a mere 1% of global GDP and only 2% of world trade,” said Yasmine Ghozzi, an economist at GlobalData.

“Over the longer term, Africa has huge potential for growth. There is a clear appetite in the region to improve and expand trade, and a realization that to do so requires industrial integration and infrastructure development,” she noted.

Investment rates in transport infrastructure have been increasing because of major continental initiatives such as the Program for Infrastructure Development in Africa (PIDA) – a strategic continental initiative for mobilising resources across African countries to transform Africa through modern infrastructure.

In East Africa, the Northern and Central transport corridors serve nine countries: Tanzania, Kenya, Rwanda, Burundi, Ethiopia, the Democratic Republic of Congo, South Sudan, Sudan and Djibouti.

Although approximately 34% of the Northern Corridor’s network of roads is considered to be in good condition, it will need $1.87 billion in financing to make it fully functional, while the Central Corridor needs an investment of $1.67 billion to revamp infrastructure and make it fully functional.

In Western Africa, the Abidjan-Lagos Corridor is an essential link in the Dakar-Lagos Corridor, which is part of the trans-African highway of the Economic Community of West African States (ECOWAS) region, whose development is one of the 16 priority continental infrastructure projects identified on the continent’s scale.

Ghozzi added that the March 2018 agreement to establish the African Continental Free Trade Area has the potential to be a major turning point for the continent’s ambitions of boosting intra-Africa trade and spurring economic development.

“With this emphasis on regional integration, the focus is on the development of regional economic corridors, particularly important for landlocked countries, interlinking highways, railways and ports in the region, hence providing connectivity between rural, national and international networks,” she explained.

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