|
FIDIC may have moved its conference this year from Tunisia to Switzerland, but uncertainty caused by the Arab Spring did not diminish interest in Africa.
The second day of the conference saw a panel convene to discuss opportunities in Africa. Those speaking included Trevor Manuel from the South African government, Hassen Chourabi from the Tunisian government, and Baroness Lynda Chalker from Africa Matters.
Trevor Manuel
Trevor Manuel, minister in the Presidency of South Africa, stressed to FIDIC contrary to negative perceptions, Africa provides a great opportunity for development of physical and human infrastructure. He said there was an urgent need for bold and committed investment but that this had to be balanced with avoiding trying to over-reach. Instead he suggested it would be better to take collective ownership of a limited number of projects.
Mr Manuel recognised the FIDIC Infrastructure Report and particularly recognised the need for FIDIC to have effective dialogue with decision makers and noted the challenge that population growth presents for the continent. He also spoke about the urgent need to address the issue of climate change, which is the number one cause of increased natural disasters and a consequent need to spend repeatedly on replacing damaged infrastructure.
He posed the challenge that 50% of wastage can be eliminated by good design and that investment in infrastructure can create opportunity for innovation in deign and help achieve a lot of the transformation required in Africa.
Trevor Manuel then identified the huge shortage of infrastructure in Africa. This amounts to $95 billion per year and consequently reduces growth by 2% per year. He also said that $45 billion has been funded locally in the past, and a study confirmed wastage of $17 billion within this expenditure.
Next, Mr Manuel identified the four key areas for growth, highlighting energy, water, transportation, and information and communications technology.
He suggested that there were significant opportunities in water through the development of hydropower. Hydro-electric power, he said, was important for low carbon development and sustainability across the continent.
Finally, the minister stressed that growth needed to come from trading within Africa as well. He said that the tri-part agreement should help to promote this. Appointment of political champions would also help this process and there needed to be market integration across borders within Africa. The shortage of east-west transportation was highlighted as a constraint to making this happen.
Baroness Lynda Chalker
Baroness Lynda Chalker, chairperson of Africa Matters, reiterated Africa’s challenges, and particularly that Africa’s biggest constraint is a lack of infrastructure.
The Baroness quoted a McKinsey report that confirmed that African projects, which include infrastructure and other industries together, could generate as much as $2.6 trillion in revenue annually by 2020, and this will correspond to an estimated population of 1.3 billion. The current level of output was approximately $1.6 trillion.
Foreign direct investment has increased significantly, she said, but only from 1% to 4%, which remains far less than elsewhere around the world. The rate of return for this investment is higher than any other developing region, but 75% of this foreign direct investment was focused on 15 countries and the largest investment share went into extractive industries.
Baroness Chalker identified that getting the private sector properly involved was key to infrastructure development. She also said that work done by government ministries was crucial too.
The Baroness then highlighted the problems of inappropriate construction. She said that the costs of correcting this was high. Infrastructure needs investment of $92 billion per year. Two thirds of this should be for new build, with over $30 billion needing to be spent on operation and maintenance.
Of this required yearly investment, she said that $40 billion had to be spent on power, $22 billion on water, $18 billion on transport, $10 billion on information and communications technology, and $3.5 billion on irrigation.
However, she said a lot more was needed, offering concerns that storage of energy has not been afforded the investment it needs.
Hassen Chourabi
Hassen Chourabi, from the Ministry of Agriculture and Environment in Tunisia, spoke about the adoption of a participatory approach in the realisation of projects to achieve sustainable development.
Following several development projects that did not achieve the expected results after Tunisia’s independence in 1956, Tunisia developed the participatory approach to better involve the community.
Mr Chourabi set out the important early phases in achieving this. He said that the first step was the preparatory phase, focused on training, informing regional and local leaders, data collection, entry into contracts and presentation.
Following that he stressed that the zoning phase was important, in which the area should be visited and assessment should take place.
Participatory approach
1. Preparatory phase (training, informing regional and local leaders, data collection, entry into contracts, presentation and approach)
2. Zoning (visit of area, assessing)
3. Prioritisation (approach, criteria, assessment and recommendations)
4. Diagnosis (approach, recommendations, presentation),
5. Planning and programming
6. Execution
7. Follow up evaluation.
What needs to happen?
The panel set out the need for a linkage across the engineering community with African governments. FIDIC and Member Associations also have role to play in helping to shape the strategy of infrastructure development, disseminating best practice, regularly engaging with policy makers, and engaging in key policies and helping to ensure effective implementation.
They also suggested efforts would be needed to identify significant gaps in provision and key bottlenecks for growth.
There should, they agreed, be the development of project pipelines. This would help engineers to influence programmes while investment should not be considered as a tap that can be turned on and off. Smoothed investment would provide the best results.
Consideration would also need to be given to the raft of infrastructure inter-connections. Roads would be important, but the slow down at border points needed to improve. The panel also suggested that ports were not well connected.
There was agreement that corruption had to be tackled effectively and that this needed to be by both holding public sector officials accountable for any bribery, and by penalising private sector organisations that supported and engaged this activity.
Policy predictability was highlighted as another issue to be addressed. Appointed champions should liaise with ministers from all countries and systems should not just be engineering dependent, but also involve finance and others stakeholders.
There was also a suggestion that financing institutions such as the African Development Bank had to take a lead role in driving investment.
Finally, there was something of a plea to engineers to help policy makers. It was made very clear that engineers are integral to the solving the huge challenge of infrastructure development in Africa, and that this needed to be combined with effective champions and individuals within the government and public sector organisations that are accountable for delivering the selected priorities.
|