Building Africa’s infrastructure: Survey of CEO challenges

Private investment in infrastructure projects has emerged as an important factor in the continent’s development and the amount of private money funding the construction of roads and power stations is set to grow. This means infrastructure-focused corporations and private equity will play a bigger role in shaping the continent’s development outlook. Increased investment brings its own set of challenges that project leaders will need to be ready to tackle.

The Numbers

Billions of private investment dollars have already been earmarked for roads, railways and power plants across the continent in the last five years. The Brookings Institution estimates that private participation in infrastructure now accounts for 50% of infrastructure financing in Africa, up significantly since the early 1990s.

As of 2013, investment in infrastructure from the private sector and public institutions totaled $52.9 billion, a 54% increase from 2011, based on the latest figures from the Infrastructure Consortium for Africa. That’s still about half of the continent’s needs. The African Development Bank predicts Africa requires around $95 billion a year to close the gap in supply and demand for power, clean water and roads.

The Challenges

While the infrastructure investment opportunity has attracted multinational companies and state-backed enterprises from partner countries in the past two years, many challenges remain that hinder rapid infrastructure development.

Arnold Meyer, director of Nera Capital, says the two biggest challenges he confronted while running infrastructure projects in Kenya were managing government “red tape” and filling skill gaps.

“If you have to bring in expertise from outside, it can set you back a year,” Mr. Meyer says. “Most major infrastructure projects that do happen, the teams are usually expats.”

Mr. Meyer says he spent 40% of his time lobbying with government and engaging with different ministries and that was time lost he could have used to run the business.

Survey

The Infrastructure Consortium for Africa published a survey of their members in 2013 that found the following issues as the key challenges investors across the continent encounter.

Screen Shot 2015-06-08 at 3.53.32 PM
Image source: Infrastructure Consortium for Africa 2013 Report

Please share your thoughts

Two years on, we are interested to know if similar challenges persist. Please complete the survey below to share your experiences.

What is the biggest challenge to managing infrastructure projects in Africa?

View Results

Loading ... Loading ...

You may also like

0 comments

Email Newsletter