Opening Up Aviation Services in Africa
The World Bank’s Africa Infrastructure Country Diagnostics (AICD) study1 provides analysis of infrastructure gaps, including for aviation, where lack of airline competition and the development of regional airport hubs are noted as important constraints. The Programme for Infrastructure Development in Africa (PIDA), a continent wide programme, builds on this analysis and has identified a number of priority projects (PIDA Priority Action Plan -PAP) which, if implemented would help interconnect, integrate and transform the continent. These include a number of projects that relate to the aviation sector.
A recent study commissioned by the Infrastructure Consortium for Africa (ICA) Transport Sector Platform highlighted both the potential for private sector participation in Africa, as well as a number of issues that constrain or discourage involvement.
This study aims to build on this foundation work and assist African stakeholders in addressing the next steps in promoting efficient African aviation services. The overall objective is to contribute to addressing the barriers to the expansion of effective aviation services across Africa through analysis and targeted interventions in support of relevant PIDA - PAP projects. Specifically, the study assesses the Yamoussoukro Decision implementation, and West Africa Air Transport and Central Africa Air Transport Hubs.
Infrastrurcture Financing Trends in Africa - 2013 Report
This annual publication of the ICA, provides a comprehensive easy-to-read review and description of the infrastructure financing trends in Africa. It provides specific information on the volume of finance/investment going into infrastructure development in Africa.
The figures contained in there report are based on figures reported by the participating banks, institutions, donors including bilateral and multilateral ICA members and also independent research and analysis.
Effective Project Preparation for Africa's Infrastructure Development
The lack of a strong pipeline of well-prepared, bankable projects has been widely recognized as one of the key constraints to infrastructure development in Africa.
‘Project preparation’ is a process which comprises the entire set of activities undertaken to take a project from conceptualization to actual implementation. The level of complexity and therefore cost of preparation varies according to the project size, sector, target beneficiaries, rural or urban focus, and various other parameters. Recent estimates by the NEPAD-IPPF show that project preparation can be up to 10-12% of the total project costs for large regional projects in Africa. The continent is grappling with resource constraints, both financial and of technical capacity for undertaking project preparation. Hence, enhancing the effectiveness of project preparation requires an analysis of factors influencing demand and supply of project preparation financing. On the demand side, there is a need to assess the institutions involved in project preparation, so that efficiencies can be reaped through better utilisation of the current resources available for project preparation; on the supply side there is a need to understand how to mobilise the requisite resources to enhance the capacity for systematic project preparation.
The objective of this paper is to raise both the demand and supply side issues, as well as to propose recommendations for addressing these concerns for the deliberation of the ICA Annual Meeting 2014
Opening up of Aviation Services in Africa – Phase I Review Report
This is the first phase of a study that addresses next steps in promoting efficient African aviation services. Specifically, this study assesses the Yamoussoukro Decision Implementation, and West Africa Transport and Central Africa Transport Hubs.
Plenary Background Paper
This paper was written to provide background information on transportation regulation and policy issues – and how these issues impact trade and development in Africa. The paper was written as a reference document for the 2013 ICA Annual Meeting Plenary session. The document was commissioned by DFID and ICA, though the views expressed in the document do not necessarily represent the views of The Infrastructure Consortium for Africa, DFID or The African Development Bank.
- PLENARY BACKGROUND PAPER_Oct30.docx (517 kB)
2012 ICA Annual Report
This comprehensive report provides an easy-to-read description of the infrastructure financing trends in Africa. It includes specific information and how and where major donors are supporting infrastructure development across the continent.
- ICA _AnnualReport 2012.pdf (9.7 MB)
AfDB Report on Green Growth in Africa
A new report, entitled, Towards Green Growth in Africa was produced by the African Development Bank in 2012 – and unveiled at the Banks’ meeting in Morocco this spring (2013). In this report, AfDB senior economists, climate change, infrastructure, private sector and regional integration experts have analyzed a wide cadre of issues, including renewable energies technology and technology transfer for green growth in Africa.
To download the English language version of the report click the link below.
Survey Results Show a Clear Need for Risk Mitigation Tools
In a new report co-sponsored by the Initiative for Risk Mitigation (IRMA), the Italian Development Cooperation and the African Development Bank, a survey was conducted amongst 112 investors and public officials. Across the 112 survey participants, virtually all stated that risk mitigation is needed to increase investment and access to finance in Africa. The principal reasons are two-fold:
- Continued perceptions of unacceptable levels of risk throughout Africa; and
- Increased demand for investment and access to finance from both domestic and international investors.
The need for a wider range of risk mitigation tools and products stems from the perception of significant risk, but also from the increased investment opportunities in Africa and the potential for private sector growth. This new, comprehensive report offers a specific needs- assessment on the perception of risk and sets forth recommendations on the types of tools that can be created to mitigate actual investment risk
As one survey respondant; the head of a leading provider of risk mitigation in Africa and worldwide, stated: "…While it may be counter-intuitive, as the risk decreases the need still increases because the amount of investment goes up. Quantum of risk is as important as the degree of risk in driving the need for risk mitigation..."
Another counter-intuitive finding of the survey is that the take-up on existing risk mitigation tools offered by multilateral development banks, export credit agencies and private insurers has been lower than expected. This is most likely due to very little technical knowledge about risk mitigation across a wide spectrum of investment stakeholders. The majority of survey respondents in this study suggested a solution to this dilemma would be the implementation of extensive training and capacity building programs.
The substantial need for risk mitigation in Africa is clearly evidenced by the survey responses in the IRMA report. Survey respondents in the IRMA report, on average, assessed the risk mitigation demand for [the entire continent of] Africa as significant: Specifically, on a scale of 1-5, Africa scored 3.74. It should be noted that most of the survey respondents, however, could/would only comment on one country and not on the continent as a whole.
The conclusions of the Report vindicate the efforts made by the African Development Bank in reinforcing its own Risk Mitigation platform, which is gradually becoming available also through its concessional window.
To download the entire English language report click on the link below.
- IRMA FINAL REPORT (5.7 MB)
Needs Assessment for Risk Mitigation in Africa
The objective of this study was to generate a ‘map’ of the needs of investors into North-Africa for guarantees and other risk mitigation instruments, and more generally into the Continent as a whole, over the next three years. This includes both sovereign and non-sovereign guarantees, and covers both short term and long term tenors. The ‘map’ provided will identify gaps in the provision of guarantee and risk mitigation products for investors – and help clarify the needs of investors in the current investment climate.
The study results underline the significant demand for risk mitigation in African countries and the need to scale up a wide array of risk mitigation instruments, services, and processes that will serve to accelerate private sector investment throughout the continent.
2011 ICA Annual Report & Annual Report Overview
The Annual Report analyses the external financial commitments/investments and disbursement to infrastructure in Africa for the year 2011. The report also presents a sectoral and regional distribution of commitments/investments for the same year.
In 2011 total external financial commitments/investments in African Infrastructure declined to 2009 levels. Overall commitments totalled US$41.5billion - a decline of 26% compared with 2010 figures. Commitments from ICA Members declined by 56% to US$11.9billion as compared to 2010 figures.
Financial commitments by 'other' financiers such as Arab Funds and particularly China has witnessed a continuous increasing trend. In 2011 such 'other' commitments grew by 39% to US$18.1billion. and the Arab Funds have doubled their contributions, and private sector commitments have nearly recovered to pre-crisis levels.
Private finance to African infrastructure although experienced a decline as compared to 2010 figures, has remained relatively stable in porportion terms accounting for approximately 27% (US$11 billion) of total external financial commitment/investments.