The African Development Bank (AfDB) announced last week that financial commitments to Africa’s infrastructure development in 2015 totalled $83.4 billion, a 12% increase from the previous year.
These stats were highlighted in a report by the Infrastructure Consortium for Africa’s (ICA) titled, Infrastructure Financing Trends in Africa 2015 report, which noted that the previous year’s investment stood at $74.5 billion in 2014.
“This comprised nearly $28.4bn of identified African national budget allocations, commitments from ICA members of $19.8bn, identifiable private sector investment of $7.4 billion, and $27.7 billion from non-ICA bilateral and multilateral financiers,” the report noted.
The report was released during the ICA annual meetings held in Abidjan, Côte d’Ivoire from November 22-23, which was jointly organised by the Ministry of Foreign Affairs of Japan and Japan International Cooperation Agency (JICA), the AfDB and the ICA secretariat.
The report’s summary explains that “of the $27.7 billion of non-ICA bilateral and multilateral finance, $20.9 billion is from announcements of funding from China. This compares with just $3 billion in the previous year while the average of announced investments from China over the five years to 2015 is $12.3 billion.
“Wide year-on-year fluctuations and lack of official data make it difficult to verify figures regarding China’s investments in Africa.
“In contrast, 2015 saw reduced identifiable infrastructure allocations of $28.4 billion by 44 African national governments compared with $34.5 billion based on 42 countries in 2014. The reduction in allocations was most marked in oil producing economies.”
It further highlighted that private sector commitments increased by $4.6 billion in 2015 to $7.4 billion, of which $7.2 billion went to the energy sector, with South Africa the main beneficiary with investments of $3.8 billion.
Even though the total amount of commitments is 12% up in 2015 compared with 2014, there are causes for concern due to steep declines in one sector, water, and one region, Central Africa.
South Africa saw the biggest increase in commitments from $4.9 billion in 2014 to $11.7 billion in 2015, substantially due to Chinese and private capital in its transport and energy sectors.
“Energy sector commitments appear to have seen a sustained but not entirely even increase over the last five-years, attracting increasing amounts of both public and private capital. But the increase is centred on North Africa and Southern Africa,” the report explained.