Fact-Checker: Former premier sounded correct on Africa’s infrastructure demands

AU Envoy Raila Odinga (left) with US ambassador to Kenya Kyle McCarter (right) at his Capital Hill office in Nairobi . They were joined by Transport, Infrastructure, Housing and Urban Development CS James Macharia. [Maxwell Agwanda, Standard]
While opening the first edition of the Afro Champions Infrastructure Boma held in Nairobi last week, Kenya’s former Prime Minister and African Union (AU) special envoy for infrastructure Raila Odinga, advocated for the establishment of a local infrastructure fund to finance the continent’s infrastructure projects.

“We need to think together in terms of fundraising and project implementation,” he said. “It is estimated that our annual infrastructure gap, that is the difference between what we have and what we need, stands at $170 billion (Sh17 trillion),” he said.

“Very few African governments have sufficient finances to fund infrastructure investments themselves. Majority of our nations are forced to rely on either loan from wealthy countries or private companies willing to take the risk.”

According to the Africa Development Bank (AfDB) Economic Outlook for 2018, Africa can manage to fund slightly half of the annual infrastructure demand on the continent.   

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“New estimates by the African Development Bank suggest that the continent’s infrastructure needs Sh13 trillion to 17 trillion ($130 billion–$170 billion) a year, with a financing gap in the range (Sh6.76-10.7 trillion) $67.6–$107.5 billion,” states the report in part.

This gap is the infrastructure investment needs minus the total amount of financing commitment made by all donors to bridge the infrastructure deficit. In 2010 the World Bank said infrastructure burden had doubled since 2005 with the challenge varying greatly by country type where fragile states face much heavier burdens while resource-rich countries lag despite their wealth.

“The cost of addressing Africa’s infrastructure needs is around Sh9.3 trillion ($93 billion) a year, about one-third of which is for maintenance — more than twice the Commission for Africa’s (2005) estimate,” said the World Bank in the report Africa’s Infrastructure: A Time for Transformation.”

According to the World Bank, the figure was arrived at after compiling data from 24 countries that together account for 85 per cent of the gross domestic product, population, and infrastructure aid inflows of Sub-Saharan Africa.

Raila’s assertion that Africa’s annual infrastructure demand stands at Sh17 trillion ($170 billion) is therefore accurate.

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However, the funding gap, the additional financing needed by governments on top of what has already been raised, is much less.

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Raila OdingaAfro Champions InfrastructureInfrastructure