Greetings again from sunny, warm Lusaka. We're now on our seventh post of the series on African infrastructure development, and those of you with the stamina to stick with it from the beginning have asked some most interesting questions along the way. Today we're going to take a deeper dive into who has financed what, and we'll look at trends over time.
A quick shot of Lusaka
Just so you know where I'm writing to you from, here's a shot of Independence Avenue in Lusaka, one of the main roads in the city.
The city is full of trees flowering with the spring rains, so before I leave here on Friday I'm going to try to get some shots to give you an idea what the city looks like.
And back to infrastructure finance
Here's a quick overview of total 2015 infrastructure commitments, the first by region and source and the second by sector and source:
Among Infrastructure Consortium for Africa (ICA) members, trends in regional infrastructure portfolios between 2010 and 2015 have varied markedly.
Let's use that to put China in perspective
Since quite a few of you have asked about China, let's take a deeper look. The two graphs above show us that China committed the most finance for Southern Africa and the energy sector - whether that means that China has invested the most in Southern Africa's energy sector over other regions' energy sectors is hard to tell without looking at the data. But they are clearly interested in energy and transport as priority sectors, and less interested in Central and North Africa.
Let's take another look, over time - here are China's commitments by region and sector from 2011-2015:
While 2014 was a "dry" year, 2015 attracted a high level of commitment, with the transport sector receiving the highest levels until 2015. Similarly, when we look at China's interests from a regional perspective, we could be tempted to think they had "ignored" Central Africa - until we look at 2011 and realise they probably satisfied their investment interests then.
Private sector investment by sector and region, 2010-15
The private sector showed a marked preference for investment in ICT in the earlier years, with 2013 representing strong interest in transport, and both 2014 and 2015 showing private investors' deepening interest in energy compared to other sectors.
"Soft" Infrastructure
A few times over the course of this series, I've mentioned "soft" infrastructure, which in reality is the hard part of infrastructure. We often say that the building "hard" infrastructure is the easy part, while building "soft" infrastructure such as robust institutions is wickedly difficult for countries. A number of you have pointed out the need for strong institutions and strong leadership. Governments and their development partners (ICPs - remember?) largely recognise this and so typically have a strong component of "soft" infrastructure finance in their portfolios.
Here's a breakdown of ICA lending for soft infrastructure development in 2014.
African governments
Identifiable African national budget allocations for infrastructure in 2015 were as follows, in millions of USD.
That word "identifiable" is also quite telling, wouldn't you say?
We've previously mentioned that government spending on infrastructure does not have to be only at national level. It is also captured at "subnational" (there's a word!) level, which includes any government entity which is not the actual national government. That can mean utilities, provincial/state governments and municipal governments. Here's an example from 2014 of infrastructure spend in South Africa's metropolitan municipalities.
Looked at a different way - in terms of source of funding:
What's next?
We're getting quite close to being able to tackle the "how" question, but we will still need to examine with a finer lens how infrastructure projects are "prepared", the topic for the next post.
First image mine, all others from Infrastructure Consortium for Africa
