Slow Implementation of Infrastructure Projects Constrains intra-African Trade, Says AfDB President
Lack of political will is slowing down implementation of vital regional infrastructure projects in Africa, the president of the African Development Bank has said.
Addressing the opening of the 18th African Union Summit in the Ethiopian capital, Addis Ababa, earlier this week, Dr Donald Kaberuka said the lack of inter-country cooperation, rather than funding, was often the main barrier to the launch and completion of critical regional infrastructure projects in Africa. This, he said, had a negative impact on the growth of the intra-African trade. ‘Boosting Intra-African Trade’ was the theme of the summit.
Dr Kaberuka gave the example of the Gambia Bridge, to link The Gambia and Senegal, as one AfDB project that had been delayed for many years due to political reasons. Following AfDB’s intervention, however, construction of the bridge is expected to begin soon.
He also mentioned the Kazungula Bridge in Southern Africa as an example of another vital project that has been delayed by slow inter-country cooperation. Funding for the bridge, which will link Zambia and Botswana across the Zambezi River, has now finally been secured and construction is to begin on it soon.
The Kazungula Bridge, which will replace a ferry service, will have a major impact on trade in Southern Africa, as it enhances the flow of goods and people in the region. Transit times for goods traded between the landlocked countries of Zambia and Botswana could be cut to just six hours on the bridge’s completion. It now takes from 30 hours to as long as a month at peak times.
Dr Kaberuka said good inter-country cooperation could lead to the timely execution of infrastructure projects that enhance increased intra-African trade and boost the continent’s economic growth.
The AfDB president gave the example of the recently completed Ethiopia-Djibouti Power Interconnection Project, which now allows Ethiopia to export electricity to Djibouti. The African Development Bank contributed USD150 million to this project. It will provide a further USD 300 million to the Ethiopia-Kenya Power Interconnection Project, which will boost the supply of power to Kenya and the East African Power Pool by some 2,000 megawatts.
Dr Kaberuka cautioned that the economic downturn that has ravaged the developed countries could weaken demand for African exports and dampen earnings. He explained that this could, in turn, undermine the ability of commercial banks in Africa to provide trade finance.
He said that as a safeguard, AfDB was looking at ways it could help cover this shortfall in Africa’s trade finance. The infrastructure financing gap, he noted, will also require innovative financing, including public private partnerships and climate funds.
African heads of state at the summit endorsed the launch of the Programme for Infrastructure Development in Africa (PIDA), a multi-billion dollar initiative to end in 2040.
PIDA is based on a joint study by the African Union, the Economic Commission for Africa, the AfDB, and the Planning and Coordinating Agency (PIDA) of the New Partnership for Africa’s Development. The AfDB is the executing arm of this initiative.
Heads of state welcomed the PIDA programme and noted that its projects address a key gap that will support Africa’s regional and continental integration. They also noted that PIDA’s longer term goal is to enhance the physical integration of Africa, boost intra-African trade, and raise African competitiveness in the global economy.
On the margins of the summit, the AfDB and the World Customs Organization (WCO) signed a memorandum of understanding, under which the two organisations will work together to enhance the capacity of customs administrations in Africa. This improved capacity of Africa’s customs authorities is designed to help boost intra-African trade.
Dr Kaberuka signed the memorandum on behalf of AfDB while Kunio Mikuriya, WCO secretary general, signed on behalf of his organisation.
“Under this partnership, AfDB’s regional infrastructure financing and WCO’s technical customs expertise will complement each other and improve the efficiency of our efforts to facilitate trade,” said Dr Kaberuka. “Coordinated efforts by both institutions to improve border management will help many companies in Africa conduct cross-border trade. This will in turn further deepen regional integration in the region,” he added.
Dr Kaberuka also held bilateral discussions with a number of African heads of state including, François Bozizé of the Central African Republic, Yahya Jammeh of The Gambia, Ellen Johnson Sirleaf of Liberia and Paul Kagame of Rwanda. He also met Michel Sidibé, the UNAIDS executive director, Thabo Mbeki, former president of South Africa and chairperson of the African Union High Level Panel on Sudan, and Abdoulie Janneh, executive secretary of the United Nations Economic Commission for Africa.