New report identifies impact of funding on Africa's infrastructure development
16 October 2017
The Infrastructure Consortium for Africa's (ICA) latest annual report, Infrastructure Financing Trends in Africa 2016, shows that commitments to Africa’s infrastructure development totalled $62.5bn in 2016, declining from $78.9bn in 2015.
Introducing the ICA's annual publication about infrastructure financing trends, which identifies how resources are being mobilised to make an impact on Africa’s infrastructure development, the ICA's Co-ordinator, Mohamed Hassan, says:
"I am delighted to present the latest ICA report, which examines current financial commitments and disbursements in support of Africa's infrastructure development, while also identifying new opportunities for resource mobilisation.
For the first time, the report examines how new resources are being mobilised at a country level. This will provide better insight into jurisdictions where political and regulatory structures, alongside institutional capacity, have created enabling environments that attract investment."
Other key findings from the 2016 report include:
- The total amount of identifiable infrastructure allocations by African national government budgets came to $26.3bn in 2016, up 9.6% from $24bn in 2015;
- Chinese funding of Africa’s infrastructure development 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. Between 2011 and 2016, Chinese investment has averaged $12bn
- In total, ICA members* reported commitments of $18.6bn, down 6% from $19.8bn in 2015. Excluding the exceptional $7bn contribution from the Power Africa initiative in 2013, commitments from ICA members have remained broadly consistent for the past five years at an average of $18.9bn;
- Members of the Arab Co-ordination Group (ACG) committed $5.5bn in 2016 to Africa’s infrastructure development, a steady increase on 2015 ($4.4bn) and 2014 ($3.5bn);
- The value of projects with private sector participation reaching financial close in 2016 was $3.6bn, of which $2.6bn was private capital. This is a significant decrease on the private capital recorded in 2015 ($7.4bn) and 2014 ($5.1bn);
- Commitments to the water sector increased substantially from $7.5bn in 2015 to $10.5bn in 2016. Commitments to the transport sector fell sharply in 2016 to $24.5bn, compared with $32.4bn in 2015. Financing of energy projects in Africa fell to $20bn in 2016, from the record high of $33.5bn in 2015. ICT sector commitments stood at $1.6bn in 2016, less than the $2.4bn reported in 2015;
- Of the $62.5bn committed to Africa’s infrastructure development in 2016, West Africa received $16.3bn of commitments, followed by East Africa with $13.1bn and North Africa with $12.9bn. Southern Africa (excluding South Africa) and Central Africa received $6.5bn and $6.3bn, respectively, while South Africa received $5.9bn.
Disbursements by ICA members* in 2016 totalled $13.4bn, the highest yet reported and up by 6% from $12.6bn in 2015. Disbursements have now remained quite consistent for the last five years, at an average of $12.6bn. Energy sector disbursements by ICA members totalled $6.1bn in 2016. Transport sector disbursements totalled $3.7bn and water sector disbursements $2.5bn.
Mohamed Hassan concludes:
"Identifying emerging trends that will bring new types of funding and new investors in Africa’s infrastructure development must be considered an important task. This report will help stakeholders grasp the opportunities available to mobilise greater resources for Africa’s infrastructure development, so that the ICA’s vision that all Africans should have access to reliable and sustainable infrastructure services can be realised."
To view and download the full report please visit the Knowledge & Publications section of the ICA website.
*The ICA is a tripartite relationship between bilateral donors, multilateral agencies and African institutions. All G8 countries (Canada, France, Germany, Italy, Japan, Russia, United Kingdom and the United States) are members of the ICA. The World Bank, International Finance Corporation (IFC), European Commission (EC) and European Investment Bank (EIB) are members of the ICA while, on the African side, membership is led by the African Development Bank (AfDB) and the Development Bank of Southern Africa (DBSA). The Republic of South Africa is the first G20 non-G8 member of the ICA, and the first African country member.