For the first time, the report examines how new resources are being mobilised at a country level, while continuing to present data on a regional basis to provide consistency with previous years’ reports. This will provide better insight into jurisdictions where political and regulatory structures, alongside institutional capacity, have created enabling environments that attract investment. Another innovation this year is sub-sectoral analysis to help stakeholders obtain a granular picture of who is providing the funds and what they are funding. We now know, for example, that the roads sub-sector attracted 44% of identified transport ICA member commitments while railways attracted just 4.1%. Non-ICA members, however, supported the maritime and ports sub-sector most strongly, with $2bn of commitments. Nearly 75% of members’ ICT sector commitments focused on broadband and fibre optic infrastructure development, while the mobile and wireless network sub-sector was the sole focus of identified sub-sectoral commitments in 2016 by non-ICA members.
Total reported financing for infrastructure development in 2016 was $62.5bn, consisting of identifiable African national government budget allocations, financial commitments by ICA members, DFIs and state funders in China, Europe, India, South Korea and the Arab Funds, as well as private sector investments. This is the lowest amount since 2012. The drop in financing is largely due to Chinese investments announced in 2016 totalling $6.4bn, substantially less than the $20.9bn reported in 2015 as well as less private sector investment. In this context, identifying emerging trends that will bring new types of funding and new investors in Africa’s infrastructure development must be considered an important task. This includes the adoption of smart and integrated infrastructure, as well as more recognition of the role of corridor management for regional projects, to encourage investors.
As far as emerging instruments are concerned, new trends include an increased interest in blended finance, in which concessional finance seeks to leverage non-concessional finance that would not otherwise have been available. This funding typology has the potential to attract new institutional, philanthropic and private sector investors, but according to public and private sector stakeholders consulted for this report, much work is needed to realise this potential. Development capital is also providing much-needed early- stage equity funding to some innovative energy and ICT projects focused on mobile telecoms. This type of finance has yet to reach other sectors, but it is encouraging to read in this report that ICA members and non-member DFIs are increasingly interested in deploying development capital. Risk mitigation strategies have also been identified as a tool to leverage additional financing for early-stage project development and bring in new types of private sector and institutional investors.
This report also identifies an emerging trend of new infrastructure financing institutions. For instance, over the past year, new financial institutions such as the New Development Bank, the multilateral development bank established by the BRICS states and infrastructure development funds such as Africa50 have emerged to support African infrastructure development. Going forward, the 2017 ICA report will include an analysis of Africa’s financing needs. Thus far, we have been only addressing the issue from the supply side and it has become essential to complement this with a demand analysis in collaboration with the AfDB hosted African Infrastructure Knowledge Programme. A still more diverse investor base, practical financial tools and an accessible range of funding types appear to be much needed. We are sure this report will help stakeholders grasp the opportunities available to mobilise greater resources for Africa’s infrastructure development, so that the ICA’s vision that all Africans should have access to reliable and sustainable infrastructure services can be realised.