Nigeria to lead transport construction with $9.8billion investment in Africa
•As continent’s investment will rise to $69b in 2020
Nigeria will lead other Sub-Saharan African countries in transport construction with an investment portfolio rising from $7.6 billion in 2019 to $9.8billion in 2020.
Moreover, investment in transport (road, bridges and railway) construction in Africa, is set for rapid growth from $47.1 billion this year to $69 billion next year (in nominal terms), based on projects being tracked by a leading data and analytics company, GlobalData.
This investment is poised at accelerating the economic and trade integration process on the continent with the entry into force of the Agreement on the African Continental Free Trade Area (AfCFTA).
GlobalData’s latest report, ‘African Transport Networks’ reveals that growth in transport construction in Africa is being driven by increasing investment in railway projects. Spending will be led by Nigeria, Kenya and Egypt where transport investment will increase from $7.6 billion, $9.5 billion and $5.6 billion, respectively, in 2019 to $9.8billion, $8.5 billion and $7.5 billion in 2020.
GlobalData is currently tracking 448 large-scale transport projects across Africa worth $430.3bn in both the public and private sectors at all stages from announcement to execution.
When completed in their entirety, the tracked projects will total over 110,000km in length (54,110km for roads, 55,345km for railway and 599km for bridges) of which 75,297km will be newly constructed, 29,197km will be upgraded and 5,561km will have an element of both construction and upgrade, crisscrossing the African continent.
Economist at GlobalData, Yasmine Ghozzi, said Africa’s lack of infrastructure is a serious obstacle to growth and development, resulting in a low level of intra-African trade and trade with other regions.
Ghozzi said the continent accounts for 12 per cent of the world population, but generates a mere one per cent of global GDP and only two per cent of world trade.
“Over the longer term, Africa has huge potential for growth. There is a clear appetite in the region to improve and expand trade, and a realization that to do so requires industrial integration and infrastructure development.”
Investment rates in transport infrastructure have been increasing, thanks to major continental initiatives such as the Program for Infrastructure Development in Africa (PIDA) – a strategic continental initiative for mobilizing resources across African countries to transform Africa through modern infrastructure.
Ghozzi added: “The March 2018 agreement to establish the African Continental Free Trade Area has potential to be a turning point in the continent’s ambition to boost intra-African trade and spur economic development. With this emphasis on regional integration, the focus is on the development of regional economic corridors, particularly important for landlocked countries, interlinking highways, railways and ports in the region, hence providing connectivity between rural, national and international networks.”
In East Africa, the Northern and Central transport corridors serve nine countries: Tanzania, Kenya, Rwanda, Burundi, Ethiopia, the Democratic Republic of Congo, South Sudan, Sudan and Djibouti. Around 34 per cent of the Northern Corridor’s network of roads can be considered to be in good condition.
The Northern Corridor needs $1.87bn in financing to make it fully functional, while the Central Corridor needs an investment of $1.67bn to revamp the infrastructure and make it fully functional.
In Western Africa, the Abidjan-Lagos Corridor is an essential link in the Dakar-Lagos Corridor, which is part of the trans-African highway of the Economic Community of West African States (ECOWAS) region, whose development is one of the 16 priority continental infrastructure projects identified on the continent’s scale.