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Thursday, February 4, 2010

Infrastructure investment: A path to Africa’s economic independence


The health of every nation’s economy and its potential to grow strongly depend on a reliable infrastructure system because infrastructures are the bedrock, life blood and the engines that drive the economy. The role play by infrastructures in the economy of a nation cannot be overemphasized especially its effect on sustainable development, foreign direct investment flow, GDP growth, inflation reduction, job creation, trade, agriculture, delivery of goods and services, lowering cost of business, improving health and standard of living and poverty reduction. Therefore, efficient and effective provision of infrastructure in a nation underlines all attempts to reduce poverty.


Lack of or inadequate infrastructures tend to slow down the growth potentials of the economy and weaken the sectors such as manufacturing, agriculture and service which heavily depend on it. Without infrastructures such as ports and harbours, roads, rail lines for example it will be very difficult if not impossible to embark on any meaningful export driven policy.


You cannot supply the industries with doctors, architects, bankers, lawyers, planners, engineers, teachers, nurses and technicians if education infrastructures and the support system needed to deliver it do not exist. Goods cannot be moved from centres of production to centres of consumption if there are no roads, rail lines, ports and inland water infrastructures to deliver them. Food production, storage and distribution cannot be increased if irrigation facilities, canals, silos, tractors and other accoutrements are not put in place. Likewise, tourists will not be motivated to come to a country if airports, hotels, roads and other infrastructures that go with it are absent; and you cannot run an efficient and vibrant economy if there are inadequate supply of power and telecommunication infrastructures.


The difference between the major economic powers and the developing world can be measured on the scale and quality of their social and economic infrastructures. A visit to any of these developed economies reveals efficient and well developed networks of surface and underground rail lines, roads, tunnels, trams, power plants, airports, harbours, telecommunication, health, education, housing, shopping malls, canals, inland water system, irrigation facilities, sewerage and sanitation infrastructures which are constantly being maintained, upgraded and expanded.


On the other hand a careful look at the state of infrastructures in any single African country reveals serious discrepancies, deficiencies, decay and neglect. The poor state can be attributed to lack of concrete and coherence infrastructure development policies, lack of political commitment, poor and inefficient management and most importantly inadequate funding. Infrastructure development is often neglected because politicians and policymakers tend to focus on short term policies and programmes that win votes, but that also retard development and keep the people in perpetual poverty. Long term policies such as infrastructure buildings are shunned because it is seen as expensive and takes time for benefits to be realised. This explains why the railway, roads, ports, waste management and water treatment plants as well as other major infrastructures are either non-existent or are barely working.


South Africa, Nigeria, Tanzania, Ghana, Liberia, DRC, Somalia and Kenya have been experiencing serious disruptions in the energy sector for years. The problem is that African governments and policymakers have focused too much attention on building dams while ignoring other potential energy sources such as solar and wind. It is believed that the solar energy potential of the Sahara Desert could power the whole of Africa and Europe. However this potential has been ignored in favour of environmentally unsound and economically unreliable projects such as hydro. The Finnish president on a visit to Nigeria in March 2009 asked: “Nigerian people have so much sun and wind, why don’t they use it for the generation of light for cooking and every other thing?” She queried, and added that “we do it in Finland for our renewable energy”. Source: www.dailytrust.com, 12 March, 2009.

The sad story is that Finland is locked up for most of the year by cold winter but take advantage of the short summer to convert the little sunshine they receive into solar energy, while African nations have sunshine most of the year but fail to take advantage of it. The change in world climatic system has led to dwindling rainfall which has worked to limit the ability of these dams to produce the needed energy to support the economy. As a result, investors are repelled and factories are folding up as the dams could hardly cope with the demand. Besides, power distribution infrastructures such as transformers and power lines are outdated. According to a recent World Bank report, the price of electricity is a leading factor in making Africa uncompetitive, relative to emerging economies like India, Brazil, Russia and China.


In Tanzania, Ghana, Nigeria, Guinea, Liberia, Senegal, Mali, Gabon, Congo, DRC, Central Africa Republic comfortable high speed train service is still a dream because the infrastructures that will make it a reality have not been built. In cases where rail tracks are available years of neglect and lack of investment has brought this vital transport sector to its knees. Whereas an express train in Japan takes about an hour to cover 280km, it takes an express train in Zambia 7 hours to cover the same distance.Most of the trains in use in Africa are locomotive, some of which are 50 years old, slow moving, worn out and run on single gauge tracks with a maximum speed of 70km/h. Despite evidence that rail network development is the quickest, efficient and cheapest way to move people and goods, the sector has received little attention in terms of investment and modernisation.


The roads in our cities are limited in capacity, poorly maintained and are choked with cars, trucks, buses. There are no provision for bicycles, pedestrians and people with disabilities. Daily traffic jams are common occurrence in Nairobi, Dar es Salaam, Accra, Lagos, Cape Town, Durban, Johannesburg, Cairo, Kampala, Free Town, Yaoundé and Monrovia. There are few parking lanes and ring roads to direct and distribute traffic away from the central business district do not exist. This makes cost of running business very expensive as passengers and goods spend hours in traffic especially during the rush hours. Besides, inter and intra city multilane freeways and expressways are still in its infancy in many countries and this has adversely affected travel, business and trade.


Lack and poor quality of port and harbour infrastructures have poorly positioned the continent to take full advantage of globalisation. Few ports and harbours are able to handle the big oil tankers, cargo and passenger planes that dominate global trade and air travel, making the continent one of the few places where cost of shipping and air travel are still provocatively high. The ports in Tema, Lagos, Durban, Richards Bay, Cape Town, Saldanha Bay, Port Elizabeth, and East London, Mombassa, Djibouti and Suez still struggle to berth some of the big ships due to unexpanded infrastructures, weak capacity and lack of appropriate technology.


About 60% of Africa’s total population live in rural areas. However, in these areas, infrastructures of every kind scarcely exist and those that exist barely function. There are few accessible roads in rural Africa and these few are poor, dirt and unpaved. As a result rickety buses, taxis and tractors dominate rural roads and accidents are high. Most rural communities become inaccessible during the rain season and harvested crops go wasted due to the poor nature of roads and bridges. It is estimated that close to 40% of food produced in some parts of rural Africa becomes rotten because drivers are unwilling to risk their vehicles. The absence of electricity, water, sanitation, irrigation facilities, silos and other storage infrastructures limit the ability of the people to create wealth and do away with poverty. Currently 250 million Africans, mostly in rural areas, are cut of from existing power infrastructure and most of them have to resort to the use of expensive and hazardous fuels such as charcoal, kerosene and firewood.


The telecommunication including ICT sector, is still struggling to catch up with the rest of the world. Fibre optic cables, which make it possible for internet users to have access to fast speed internet connectivity, are very limited in the continent. Internet connection is absent in the rural parts of the continent and connection is very slow in the cities where internet is available. Besides it is also very expensive. In many areas, there are no fixed telephone lines and mobile telephone infrastructures are still at the infancy stage. Absence of telecommunication infrastructures is part of the reason why cost of running businesses is expensive in the continent compared to other regions. Schools, hospitals, banking and security operations are handicapped by the absence of these vital infrastructures. Companies and industries that heavily rely on ICT for efficiency and higher productivity are prevented from doing so, due to the poor state or absence of the infrastructure.

An example of how bad the situation is was captured in South Africa, the continent’s economic power house. On Wednesday, September 9, 2009 “Unlimited IT”, a South African information technology company, proved it was faster for them to transmit data with a carrier pigeon than to send it using Telkom, the country's leading internet service provider. Internet speed and connectivity in Africa’s largest economy are poor because of a bandwidth shortage. Local news agency SAPA reported the 11-month-old pigeon, called Winston, took one hour and eight minutes to fly the 80 km (50 miles) from Unlimited IT's offices near Pietermaritzburg to the coastal city of Durban with a data card strapped to his leg. Including downloading, the transfer took two hours, six minutes and 57 seconds -- the time it took for only four percent of the data to be transferred using a Telkom line. SAPA said, Unlimited IT performed the stunt after becoming frustrated with slow internet transmission times” Source: Reuters Wednesday September 9, 2009.

The agricultural sector is no exception. Majority of farmers have no access to improved seeds, tractors, irrigation facilities, and silos and other storage facilities. Besides, access to credits which could enable the farmers to provide these facilities themselves do not exist. Farming in Africa is dominated by the use of cutlasses/machetes, hoes and other rudimentary equipments. Despite the presence of major rivers and lakes, lack of irrigation infrastructures such as canals, pumping and water distribution machines have deadly hampered food production. Farmers still rely on nature for rain in order to plant and farming is still at the subsistence level where the average farmer is only able to produce to feed himself with little or nothing to sell. During bumper harvest lack of processing and storage facilities result in some produce being destroyed by farmers for lack of market. Farmers are usually forced to sell their products cheaper than they would otherwise have should processing and storage plants were available. The result is that during lean season food shortage, high food prices, hunger and malnutrition become the order of the day and extreme poverty among farmers also becomes apparent. The riots and hunger which occurred in Zimbabwe, Ethiopia, Niger, Mali, Burkina Faso, Sierra Leone and Somalia in 2008 were a direct result of lack of infrastructures in the agriculture sector. Failure to invest in agriculture infrastructure is the main reason why African countries continue to rely on food import and handout from China, US, and India.


In most countries there are no proper housing infrastructures. Pipelines for water delivery are absent. Electricity and waste management infrastructures do not exist not even in the capital cities. A visit to any village or town gives the same picture of substandard housing. The Rural housing landscape is still dominated by mud and bamboo housing and raffia roofing and water, energy, waste management infrastructures do not exist at all. In the cities housing supply lag way behind demand. Few cities can boast of formal housing sector where transport, water, energy, waste and other infrastructures are available and in areas where the infrastructures are available they are often of poor quality, of low capacity Residents usually face constant barrage of water and energy disruptions with high utility bills as these sectors struggle to cope due to lack of infrastructure and technology. Lack of affordable housing coupled with dwindling housing stock have given way to slums, shanty towns like those in Soweto in Johannesburg-South Africa, Kibera in Nairobi-Kenya, Sodom and Gomorrah in Accra-Ghana, Manshiyet Nasser in Cairo-Egypt and Agege in Lagos-Nigeria among others. These informal settlements do not have access to running water, electricity, toilets, access roads, playgrounds, schools, clinics and car parks because the infrastructures are simply not there.

“In Ghana, for example; Sewerage is almost non-existent, with only a portion of Accra, Tema, Kumasi and few regional capitals enjoying piped sewerage services. There is no centralized wastewater treatment system in most of the cities and households and commercial premises generally have no onsite flush latrines. Within Accra, Kumasi, Takoradi, Tema and most of the cities and towns the absence of waste infrastructures has led to a situation where solid waste sometimes remain uncollected for weeks, and is unhygienically burnt and disposed; indiscriminate dumping of waste is creating health problems.

There are few cities and towns with reliable piped water supply. Many residence of Accra do not have access to frequent supply of good drinking water and many households have to resort to extreme measures to be able to cope. In short, the infrastructures to deliver water to the people are either not existing or their capacities are too small to support the growing demand. Poor city planning and management practices; as well as, untamed urbanization and continued influx of people from the rural areas into the cities have complicated the matter. The water situation in the rural areas is even worse. In the three northern regions people have to walk several miles in order to get water. As a result, people are not able to live healthy lives due to poor water quality and dwindling accessibility”. Source: Lord Aikins Adusei in his article “Ghana must avoid the resource curse”, 5 February, 2010.

The same problems are found in Nigeria due to absence of infrastructure.

Nigerian cities are full of unmanaged waste; filth and diseases are rampant; as municipalities and health officials struggle to do their best with the near absence of infrastructures.

Even Abuja; the supposedly planned federal capital, has not escaped the problems, as the following statement shows: “From Lagos which is ranked as one of the fastest growing cities in the world and yet the dirtiest and least liveable to Abuja, our supposedly modern capital city … the story is the same. There is entropy of organized disorder, decay of infrastructure facilities …inefficient waste management system. [Abuja] was properly conceived to contrast with the crisis-ridden Lagos … Greed, corruption and avarice of highly placed government officials including politicians thwarted the Abuja plan… Consequently, unconformity and chaos reigned in Abuja”. Source: Onyanta Adama, from her book: ‘Governing from above: solid waste management in Nigeria’s new capital city of Abuja’, 2007 page 15.


The education sector which is the foundation of the continent’s development has its share of the infrastructure problems. The institutions lack modern facilities such as state of the art libraries, laboratory simulation facilities, studios, computers, books, staff bungalows, classrooms, students’ accommodation and electricity. In most institutions it is still chalk, paper and blackboard and there are no internet connections. The infrastructure problem has affected the quality and delivery of education in the continent. Of about 9,760 Accredited Universities in the World that were ranked, only University of Cape Town and University of Witwatersrand managed to place 179 and 319 positions respectively in the top 500. (Source: topuniversities.com/2008).


Without the infrastructures, the institutions are unable to produce the high quality of architects, engineers, planners, bankers, lawyers, doctors, teachers, nurses, technicians that Africa desperately need in this increasingly scientific and technological age. This explains why in most countries, major architectural and engineering works are undertaken by foreigners and foreign companies from USA, Japan, China and Europe. The Universities lack well trained lecturers and some of them are amateurs in the use of computers, internet, power point and pod casting all are powerful tools essential to delivering high quality education. In most universities, students and lecturers have very limited access to electricity. It limits their ability to conduct any meaningful academic work. Whereas students in advanced countries immediately get their hands on books as they are released those in Africa have to wait several years to get the same books. A student in Sweden for example, only needs his/her username and password to access tens of thousands of online references, e-books and e-journals from around the globe including articles and papers written by some of the world’s best minds. On the contrary, very few African universities can boast of a million volumes of books in their libraries. Even the few books that exist are so old that information contained in them are valueless. Students have to rely on lecture notes from lecturers. This explains why there are few breakthroughs in our universities. In Sweden for example, almost all academic activities are organised on the internet through what is called Mondo: a project that allows students to do their assignments and submit them online and also interact with lecturers outside the classroom without having to meet face to face. The project is successful because internet infrastructures are available everywhere.


In Nigeria, Gabon, Equatorial Guinea, Angola, Chad all major oil producing and exporting countries, it is regrettable to note that lack of infrastructure has hampered expansion in this huge revenue generation sector, leading to shortages of petroleum products, higher prices and queue forming. In these oil exporting countries pipe lines that transport oil to ports for shipment and depots for internal distribution are so old that leakages and accidents are frequent. Due to lack of infrastructures and absence of petrochemical industries, the oil producing nations have to import most of their petroleum products from abroad.


It is obvious that lack of infrastructures are the cause of the poor economic performance and poverty seen everywhere in Africa. There is no doubt that without heavy investment in infrastructures; it will be very difficult for Africa to make any progress towards economic independence. If Africa wants to join the Asia Tigers and free them from economic dependency then they must begin to invest heavily in the infrastructures that will create necessary environment for businesses to grow, serve as magnet to attract investments, and make their economies competitive. Increasing access to water, sanitation, roads, electricity, railways, trams, inland water transport system, airports, harbours, telecommunication, canals, and providing tractors, improved seeds, credits, subsidies and irrigation infrastructures are essential to Africa’s economic and social development. The long term survival of its people; for without the infrastructures, will be impossible to promote economic growth, reduce poverty and improve both urban and rural lives.


It is without, that infrastructure investment is very costly and governments alone cannot provide the needed funds to embark on the needed infrastructures. Therefore governments and policymakers in Africa must team up with private business which has both the money and the technology to build these infrastructures. The most single important ingredient for infrastructure building is commitment on the part of government. Once governments are committed to building the infrastructures they can then team up with individuals and businesses that have the resources to finance the projects. Hammarby Sjöstad is a district of Stockholm but used to be a run-down port housing some polluting industries. When Stockholm City authorities wanted to turn Hammarby Sjöstad into a modern and eco-friendly district, Stockholm City provided 500m euros to clean the heavily polluted environment, developed the area and converted it into a modern and eco-friendly district. To do this the City joined forces with 25 construction companies which then provided 80% of the 5bn euros that was needed for the development of the district. What made the project successful was the commitment on the part of the city authorities in developing the area.

Lack of infrastructures and inappropriate technologies will continue to impact negatively on the continent’s ability to manufacture goods and produce food for consumption and for export. Inadequate infrastructures will continue to limit the growth potential of export sector. Goods and service delivery within Africa will continue to be considerably low unless there is a drastic effort to build the new generation of infrastructures that will enable the continent to take advantage of the huge natural resources it is sitting on. The export sector will be dominated by the export of crude oil, raw cocoa beans, coffee, tobacco, and cotton, tea which also has the disadvantage of not bringing in enough revenue needed to eradicate poverty and other social and economic problems unless there is a serious political commitment to develop the infrastructures needed to transform the continent. Gold and diamond will continued to be exported to Switzerland, Belgium, Britain and Dubai for cutting and polishing before Africans go there to buy the wedding rings and bracelets to sell unless policymakers begin to look at infrastructure development with a positive attitude. The millions of jobs that gold and diamond cutting and polishing create will continue to be found in Israel, Belgium, Britain and US unless there is a comprehensive infrastructure development policy and implementation throughout the continent. The necessary infrastructures and technologies must be sought through partnership with private business if the continent stands any chance of redeeming itself from poverty and economic dependency.


If Africa is ever going to bridge the massive infrastructural gap, then there must be commitment on the part of governments, city authorities and policymakers to critically work with those with capital to move the continent forward.


Lord Aikins Adusei

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