‘Political infrastructure projects fuelling Africa’s $170 billion financing gap’
Experts have said that Nigeria and the rest of Africa may continue in the rhetoric of “growth potential” if they do not invest in strategic infrastructure needed to drive trade and the long-sought financing for economic integration.
The experts, who spoke at the ongoing African Export-Import Bank (Afreximbank) yearly meeting, said investments that do not lead to increase in productive activities are just mere exercise and waste of resources.
They said there is an existing financing gap worth $170 billion, but made difficult by a combination of poor information and risk factors associated with infrastructure.Chief Executive Officer of Macroeconomic and Financial Management Institute of Eastern and Southern Africa, Caleb Fundanga, harped that given the continent’s commodity-based offering, the development of value chains and processing of the products are the best way to foster the intra-African trade.
He added that the value chain development, which ensures processing of the commodities as opposed to selling them in raw state, should be central in determining the type of investment in infrastructure, because it is related to industrialisation as well.He said that investing in projects just for its sake without considering how it will foster more development, is a way of sustaining the risks that will scare financing and leave the economy bereft of benefits.
Also, Chief Executive Officer of Export Credit Insurance Corporation of South Africa SOC Limited, Kutoane Kutoane, said project prioritisation is the sole job of the government but the benefits depend on what is given attention before the other.He said the most important thing is to ensure that whatever direction followed is a result of consultation that truly reflects the needs of the society, adding that Africa must be careful, especially now, to ensure that the political elite do not hijack policies through the rising cases of corruption.
“This happened in a lot of situations in the continent where procurements for items are not accounted for. If we are actually going to improve the financing of trade in the continent, the issues of governance must be addressed, because they are part of the risk calculations.“Building of infrastructure that are not necessarily directed to the advancement of productive activity or not executed at all, will not lead to growth and cannot improve risks challenges,” he said.
In a similar vein, Group Chief Executive Officer, Ecobank Transnational Incorporated, Ade Adeyemi, stated that Africa and Nigeria, in particular, has everything to succeed, but needs the leadership and the led to get it to the right path.“We need a disciplined environment to convert the opportunities to reality. I am very bullish about what is possible in this country. All that is necessary is to create that enabling environment to realise this,” he said.