Who is financing Africa’s infrastructure development?
Overall commitments to Africa’s infrastructure development from all reported sources declined from $78.9bn in 2015 to $62.5bn in 2016, the lowest level in five years*.
Falling commitments from 2015 to 2016 are substantially due to a large reduction ($14.5bn) in reported Chinese funding and a $4.9bn reduction in private sector investment. Overall, commitments fell by $16.4bn from 2015 to 2016.
The fall in Chinese funding particularly hit the energy sector, with overall sector commitments falling by $14.7bn (42%) between 2015 and 2016. China’s $1bn funding for transport in 2016, compared with nearly $10bn the previous year, explains most of the overall decline in funding.
Commitments of $18.6bn from ICA members were reported in 2016. While this is 6% down from the $19.8bn committed in 2015, ICA members’ commitments have remained broadly consistent for the past five years, averaging $18.9bn.
Internally-funded African national government budget allocations for infrastructure development, which were on an upward trend until 2014, remained depressed in 2016 at $26.3bn, although this was a slight improvement over the $24bn of internally funded budget allocations reported in 2015.
The Arab Co-ordination Group (ACG) reported commitments of $5.5bn in 2016, the third consecutive annual increase and the highest amount in the last eight years, over which period the average annual commitment has been $3.8bn.
India’s commitments more than doubled in 2016, to $1.2bn compared with $524m in 2015. South Korea committed $432m to four projects in 2016 compared with a single commitment of $81m in 2015. Brazil announced no new commitments in 2016.
Commitments of $924m, more than double 2015 ($419m), were recordedfor four non-ICA member regional development banks – BOAD, EBID, TDB and EADB. Commitments by non-ICA member European DFIs totalled $392.2m in 2016, a significant decrease on 2015 ($876m).
*While the 2016 total of $62.5bn is more than the $55.9bn and $41.5bn reported in the 2010 and 2011 editions of this report, data from African national government allocations (which averaged $28.4bn in the five years to 2016) was not included at that time.