Windhoek ‑ The Economic Commission of Africa (ECA) is urging African governments to set aside at least one percent of their countries’ gross domestic product (GDP) to build enough resources for financing infrastructure development.

Setting aside a percentage of GDP for infrastructure projects, including rural infrastructure, would advance efforts at continental level to boost investment in infrastructure, critical to de-bottlenecking trade logistics across the continent.

Africa Trade Forum, which met a week ago in Addis Ababa, also urged governments to engage all major stakeholders in infrastructure development, including but not limited to public private partnerships.

African governments are also being urged to boost efforts towards “corridor approach to integrated regional transport”.

Efforts should also be directed at improving border and customs efficiencies and trade-related processes, through the use of single window systems and one-stop border posts such as Chirundu between Zambia and Zimbabwe.

Calls for African governments to commit resources to financing infrastructure projects merge with initiatives being undertaken by regional economic communities such as Comesa, SADC and developmental financial institutions such as African Development Bank (AfDB).

SADC member states have committed themselves to establishing a $1.2 billion infrastructure fund, which is expected to be operationalised in 2013.

Comesa, which is Africa’s largest trading bloc, is finalising plans for a $1 billion infrastructure financing plan.

Lack of guaranteed electricity supplies, functioning road and rail networks, modern sea ports, border and customs clearance infrastructure, partially contributes to Africa’s inability to trade within itself.

While intra-African trade is around 10 percent or recorded trade, trade within the European Union and Asian markets ranges between 60 and 70 percent.

“It is equally important to use trade to upscale the current appreciable growth rate of 5.2 percent per annum achieved in the continent since the turn of the century.

“The potential of intra-regional trade is evident from regions that have moved up the value chain for while intra-Africa trade is in the region of 10 percent of recorded trade, the comparable figure in 60 percent and 70 percent in ASEAN and the EU respectively,” Carlos Lopes, ECA under-secretary-general and executive secretary, said.

African governments should invest in expanding electricity generating capacity by 7 000 MW every year, lay 22 000 MW of cross border transmission lines, interconnect capitals, border crossings with good quality roads, boost agricultural land under irrigation among other projects .

In 2010, the World Bank estimated that to develop Africa’s infrastructure to modern and internationally competitive standards, an investment of US$93 billion ‑ nearly 15 percent of Africa’s GDP ‑ is required every year.

Trade analysts say that on average, 30 percent of Africa’s infrastructure needs rehabilitation.

The backlogs in rehabilitation stems from under funding of maintenance, wastage in rehabilitation when there could be preventive maintenance.

An example is power and water utilities across the continent, which are suffering from distribution losses, under collection of revenues and over staffing.

Analysts say that state-owned utilities only collect 70 percent to 90 percent of billed revenues due to rent seeking activities.

The energy sector, across the continent is estimated to lose US$3.4 billion annually while the water sector loses around US$1 billion every year.

 

 

Source: http://www.southerntimesafrica.com