Excellencies Uhuru Kenyatta, President and Commander in Chief of the Defence Forces of the Republic of Kenya and Cyril Ramaphosa, President of the Republic of South Africa and Chairperson Africa Union and Presidential Infrastructure Champions Initiative, I am most grateful to you for making time for this conference despite the big challenges you are dealing with in our respective countries.
Let me take this opportunity to commend both of you for good fight you have led against the coronavirus pandemic.
Your leadership in our respective countries and our continent has so far seen us keep the worst at bay. I wish you well and offer my support in this battle.
I thank everyone present for making time.
We are all aware of the damage the current pandemic is doing to our economies.
It has forced us to scale down or abandon the many ambitious plans we had for our people as a continent or individual countries.
To gain lost ground, the years ahead are going to require that Africa prioritizes a solid and functional infrastructure connectivity as a critical catalyst for our social and economic recovery. Even before this pandemic struck, the critical role of Africa’s infrastructure development had acquired a new significance as the accelerator of the continent’s integration and transformation when we committed to regional and continental free trade.
It is however a fact that we have been wanting in this area even before the pandemic struck and the situation may get even worse given the present challenges.
The Programme for Infrastructure Development in Africa (PIDA) estimates that Africa requires over $360 billion up to the year 2040 to finance its critical infrastructure projects. In the meantime, we have an annual infrastructure financing gap of between $60 Billion-$90 billion.
The central purpose of this conference is therefore to enable us put our heads together as politicians, technocrats, professionals and continental leaders and establish ways to address this decades old problem in a more sustainable manner going forward.
Numerous studies have shown that our infrastructure financing gap is not insurmountable. The studies show that there are numerous financial resources in the content and the world, that can be deployed provided we have BANKABLE projects. Currently, we have an insufficient supply of such projects.
A key element of any infrastructure program is project PREPARATION.
In Africa, however, project preparation has proved to be particularly challenging where the infrastructure involves several countries or covers an entire region.
The problems limiting existing planning preparation facilities include bureaucratic administration of facility funds; inadequate technical capacity; ad-hoc nature of preparation support; uncoordinated services and insufficient assistance for early stages of project preparation.
For us in Kenya, an easy example to cite is the LAPSSET project that seeks link the East Coast of Africa to the Atlantic in the western part of the Continent. It is as multi-national and as complex as they come. It has been an eye opener on the difficulties Africa faces with continental projects and why they have to be addressed if we are to link and open up the Continent.
We need a regional coordinated approach to regional or continental infrastructure programs. Regional coordination will ensure the implementation is done with shared objectives and that the overarching project factors like land acquisition, project plans, environmental studies, and stakeholder’s engagement are addressed from a central point.
Regional coordination will also make it easier for us to attract investors through one Stop Information Center for a mega project and not bits of information for bits and pieces of a project. Regional coordination will help us harmonize and standardize our policies and regulations, making those projects bankable.
Without a constant flow of well-packaged projects, Africa’s infrastructure requirements will simply continue to grow.
That is why at this event, we are keen to present an Infrastructure Funding Framework at the center of which must be project preparation. Some of the problems limiting existing planning preparation facilities include bureaucratic administration of facility funds; inadequate technical capacity; ad-hoc nature of preparation support; uncoordinated services and insufficient assistance for early stages of project preparation.
Out of this forum, we hope to adopt a framework that can position the investor community as central to the critical stages of infrastructure project preparation. The Framework is intended to be independent BUT affiliated to Regional Economic Communities (RECs) to ensure the necessary political backing.
With bankable projects, we then have to address funding. Currently, we have low domestic financing from member states for regional projects because such projects face competition from other domestic priorities.
This leaves us with no option but to leverage and increase private sector financing for regional an trans-boundary infrastructure projects.
Such funding models have worked but at snail’s pace.
The time has come for us to actualize Africa Continental Infrastructure Fund under the auspices of the AU to pool resources for our infrastructure needs. Such a body would be symbolically and strategically valuable.
Africa must pursue a funding model that focuses on a combination of domestic sources and private sector financiers as is the case in Europe and Asia, among other parts of the globe.
We are therefore here to confront the fact that the continent needs new ways and approaches to prepare for the infrastructure financing market. It is my expectation that at the close of this meeting, we will have practical solutions to this urgent challenge that is holding the Continent back.
I thank you.