Financing Trends - 2014 Overview
The Infrastructure Financing Trends in Africa 2014 report shows that over $74bn was committed in 2014 to the development of Africa's infrastructure, and that disbursements by ICA members reached a record level of $13bn.
The 2014 commitments of $74bn is $25bn less than the $99.6bn reported in 2013. A sharp decline (of over $10bn) in Chinese commitments and the inclusion in 2013 of an exceptional £7bn commitment from the US towards the Power Africa initiative account for this decline.
African governments’ budget allocations to infrastructure of $34.5bn account for the largest share of reported commitments. ICA members* reported commitments totalling $18.8bn in 2014 - less than the $25.3bn committed in 2013 but, excluding the exceptional US contribution of $7bn in 2013, the figure is on a par with the volumes committed since 2012. The remaining commitments were made by non-ICA member external public sector funders and the private sector.
Key findings from the report include:
- Identified central budget allocations by African governments totalled $34.5bn in 2014, taking into account data obtained from 42 countries;
- Africa's regional development banks committed nearly $2bn to infrastructure projects in 2014;
- Private sector committed $2.9bn mainly concentrated on energy projects;
- 88% of the $18.8bn committed by ICA members was directed to 'hard' infrastructure, while 12% went to 'soft' infrastructure, such as capacity building, project preparation and research;
- 49% of the value of commitments by ICA members was directed at the energy sector, 19% to transport, 18% to water; 11% to multi-sector projects and 3% to ICT - and there is a growing trend towards supporting multi-sector projects;
- Transport operations attracted the most financial commitments of any sector in 2014, taking into account all sources of finance;
- North Africa has overtaken West Africa as the region receiving the highest commitments in 2014, with 27%, while commitments to Central Africa reached their highest point for five years.
- Subnational financing by state/city/provincial authorities and state owned enterprises/corporations including utility companies committed $9.1bn.
The report also found that, according to both ICA members and the private sector, constraints such as policy uncertainty, bureaucratic delays and a lack of transparency remain a challenge to increased investment in infrastructure, while a shortage of adequately prepared or bankable projects was a bigger obstacle than finding project finance, according to both ICA members and operators.