|Cost of addressing Africa's infrastructure needs put at $93 billion a year, Wednesday, 18 Apr 2012|
(BusinessDay) Finance required to raise infrastructure in Sub Saharan Africa to a reasonable level within the next decade is estimated at $93 Billion every year, a World Bank report has shown. The estimates cover the Information Communication Technology, Irrigation, Power, Transport and Water Supply and Sanitation sectors.Of the total required, existing expenditure is estimated at $45 Billion per annum and after accounting for efficiency gains of $17 Billion, the funding gap remains at about $31Billion. ''Infrastructure is a cardinal challenge facing Africa, thereby creating room for the inability of Africa to key into the avalanche of economic and commercial opportunities available in the continent,'' says Kenneth Okpara, Commissioner for Economic Planning, Delta State during March Breakfast forum of Nigerian-South African Chamber of Commerce sponsored by Warri Industrial Business Park.
Okpara noted that Africa's infrastructure stocks and quality is among the least in the world, noting that lack of good governance is a major problem that prevents the continent from taking its rightful place as regards socio-economics.''One approach to address this challenge is to facilitate the increase of private provision of Public–Private Partnership (PPP),'' he notes, saying that the partnership assumes transactions where the private sector retains a considerable portion of commercial and financial risks associated with a project.Okpara added that leveraging private sector financing through public private partnership and capital market (bonds) are the means through which the gap can be addressed.Highlighting the challenges facing Public Private Partnership such as financial limitations, the honorable commissioner explained that many public and private companies lack access to local currency and affordable long term loan. ''There is also a need for government support to the capital investment required to make Public Private Partnership transaction commercially viable,'' he said, stating that Public Private Partnership can only thrive in an environment where there is a clear legal and regulatory framework, improved competitive bidding procedures, more consistent sector policies, including tariff regimes that allow for greater if not complete cost recovery.
Okpara cited Delta State as a model of special economic zone when it comes to Public Private Partnership; the Warri Industrial Park set up by Delta State Government in partnership with Arco Petrochemical Nigeria Limited, Koko Free Trade Zone in Koko, Delta State in partnership with Chevron and NNPC, including Asaba ICT Park where investors have expressed their interest. The project director of Warri Industrial Park, Helen Emore in a statement noted that Warri Industrial Business Park will provide ideal business environment for stakeholders of innovations processes in the country's industrial sector to interact with each other, attract capital, domestic and foreign venture, as well as technological development and transfer. ''The proposed growth in the industrial sector of Delta State and Nigeria will not only result in the creation of new knowledge, new enterprises, new opportunities and new export oriented product that will stimulate the service and commercial sectors of the economy, but will raise the competiveness of such industries in the global market.''
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