DRIVING WEST AFRICAN REGIONAL GROWTH THROUGH THE DEVELOPMENT OF INDUSTRIAL INFRASTRUCTURE

A. What is needed for Regional Infrastructure Plans to materialise

What is the quality of the critical infrastructure – electricity, telephones, roads and water?

  • Africa’s critical infrastructure is far short of the standards in other regions. Africa’s power infrastructure only delivers a fraction of that found elsewhere in the developing world.
  • The transport sector in Africa is inadequate and ineffective due to low maintenance of the existing infrastructures. Less than 30 percent of Africa’s roads are paved and depicts a huge regional diversity. The railways are fragmented with South Africa accounting for nearly a third of all Africa’s railways.
  • Air transport systems are relatively underdeveloped. All countries have at least one international airport but these are limited due to limited traffic handling capacity, lack of modern equipment, deteriorating runways, obsolete traffic control systems.
  • Though some countries have national airlines these are usually old planes with poor safety records. There are some privately owned airlines.
  • Maritime transport is extremely important. However port productivity is average and plagued by poor management and excessive bureaucracy.
  • In terms of power generation hydro accounts for approximately 20 percent of power in Africa, whilst the bulk about 77 percent is thermal generated

What is the per capita supply of these components in Africa compared to the other advanced countries?

  • The 48 countries of sub Saharan Africa with approximately 800 million people generate the same amount of power as Spain with Africa generates 37 megawatts per million of its population compared to 326 in other low income countries.
  • Only 16 percent of Africa’s population have electricity coverage compared to 41 percent in other developing countries.
  • Africa has approximately 10 mainline telephone lines per thousand of the population compared to 78 in other low income countries. Africa accounts for about 2 percent of global telephone lines. Distribution in Africa is biased towards the urban areas (80 percent) which account for only 20 percent of the population. However in terms of GSM lines 57 percent of Africa is now covered. The mobile density is 55 lines per thousand of the population.
  • In terms of internet usage Africa has the lowest internet usage about 1 percent of the global usage.
  • Road transport is the most widely used but the road density is 137 km per kilometre squared against 211km in other low income countries.

What are the identifiable constraints to the development of such infrastructure?

  • Political instability e.g. civil wars, coups, sabotage,
  • Lack of investment
  • Lack of  maintenance of existing infrastructure
  • Private sector lacking due to inadequate regulatory framework

C. What are the facts about power needs for industrial growth and development and how can private public institutions cooperate to achieve this?

  • What is the per capita supply of these components in Africa compared to the other advanced countries?
  • The 48 countries of sub Saharan Africa with approximately 800 million people generate the same amount of power as Spain with 45 million people.
  • Per capita power generation in Africa is 0.13, compared to US (3.2) UK (1.33)
  • Africa generates 37 megawatts per million of its population compared to 326 in other low income countries.
  • Only 16 percent of Africa’s population have electricity coverage compared to 41 percent in other developing countries. The average for the rest of the world is 50 percent
  • Africa needs about 270GW to satisfy an estimated growth in energy demand of 3.4 to 4.4 percent annually for the next 25 years, with an estimated cost of about $563bn.
  • Public private institutions can cooperate by jointly developing pipelines, refineries and other critical infrastructure needed to facilitate production and trade.
  • Regional projects (WAPP, SAPP etc) can ensure that costs are shared among countries.

What are the available sources and are they sustainable?

  • Bio fuels e.g. development of ethanol etc. Africa has the potential to exploit bio fuels due to the land mass and favourable climate but needs more investment and cooperation with countries such as Brazil in order to make it a sustainable venture.
  • Similarly the continent has the potential to harness wind and solar energy but further cooperation, research and investments may be needed.
  • The most sustainable and viable source of energy may well be hydro given the number of rivers across the continent but again this requires considerable investments to build dams and hydro power stations. DRC has the potential to double Africa’s power supply if and when a proposed hydro station (Grand Inga) is completed. However China has shown the willingness to help African countries develop and exploit this source of energy.
  • Though a number of African countries have rich deposits of uranium and other materials for nuclear energy, they remain elusive given the technical and capital requirements necessary to harness these forms of energy.

What are the current levels of production in uniform units?

  • Africa with a population of 800 million produces about 100,000MW compared to the USA with a population of 250 million producing 813,000MW and UK population 57.5 million producing 76,000MW
  • South Africa accounts for 45 percent of total electricity output of Africa.

What are the constraints in increasing production?

  • The constraints include the fact that most African countries depend on thermal plants for their energy needs which are usually insufficient to cater for the growing needs and population.
  • These thermal plants run on fuel which is mostly imported and with rising prices, making the cost of energy production high and unaffordable to majority of the population.
  • The distribution network is poor with supply mainly concentrated in urban areas with just about 20 percent of the total population. Distribution to rural areas is poor and in some cases non existent

D. How can the region best appeal to investors during the global financial recovery?

  • The region has to improve its rating on the global doing business index
  • Create level playing field for business investment
  • Embark on reform of the judicial system to ensure speedy resolution of commercial disputes
  • Ensure protection of life and property
  • Copyright law where it exists must be enforced
  • Africa should ensure easy access to its markets by all prospective customers; reduce volatility in production and increase production and refining capacity.

E. How can governments and industry transform the regions development?

  • Undertake joint projects such as the West African Gas Pipeline, the West African Power Pool, regional refineries which will reduce the costs, through cost sharing and increase the benefits in the region. This will also provide connections to/ for land locked countries.
  • Set up more public private partnerships, and create the environment for the involvement of independent power providers including privatisation of existing state owned companies
  • Sustained investment in infrastructural facilities