Africa must address ‘soft’ infrastructure issues

Lazarus Sauti

Despite various natural resources in African countries, there is little connection between high growth rates and reductions in inequality.

Poverty is ravaging Africans.

“Inclusive growth remains an elusive concept on the world’s poorest continent and threatens to undermine the considerable gains made over the past decade across the areas of macro-economic reform, political stability, and improving business and regulatory environments,” affirms Ronak Gopaldas, head of country risk at the Rand Merchant Bank in South Africa.

He adds: “In light of these trends, infrastructure investment remains a key element to Africa’s economic success. The paradigm with which such investment is viewed needs to assume a new form, with the recognition that both ‘soft’ and ‘hard’ infrastructure is critical to unlocking the continent’s social and economic potential.

Gopaldas goes on to say that at present, the continent of Africa struggles with major deficits in both these ‘soft’ and ‘hard’ infrastructure areas.

Hard infrastructure, to start with, submits to the physical facilities and/or installations needed to operate, manage and monitor a system with the intention that the structures are permanent.

For example, when power lines or communication towers are built, the goal is for them to stay in place indefinitely.

On the other hand, soft infrastructure refers to all the institutions which are required to maintain the economic, health and cultural as well as social standards of a country. Examples include policy, financial system, the education programmes, the health care structure, the coordination of government, law enforcement and information and communication technology (ICT).

Both ‘hard’ and ‘soft’ infrastructures are essential for the progress and discovery of a nation, but most – if not all – African countries invest heavily in ‘hard’ infrastructure only paying little or no attention to ‘soft’ infrastructure.

As a result, they are lagging behind in terms of political, economic, social, as well as technological transformation.

“Many African countries are lagging behind the world in ‘soft’ infrastructure that has enabled governments in developing and emerging economies to bridge the developmental gaps in areas like healthcare and education,” subscribes Gopaldas, adding that everybody knows about Africa’s infrastructure deficit, but very little attention has been paid to ‘soft’ infrastructure.

Zimbabwe National Road Administration board Chairperson, Albert Mugabe, at a recent African Road Maintenance Funds Association (ARMFA) meeting in Victoria Falls agreed that insufficient investment in ‘soft’ infrastructures drains economies and halts socio-economic transformation.

African Development Bank (AfDB) President Donald Kaberuka, however, notes that investments in ‘soft’ infrastructure issues require fewer resources, but they can make regional infrastructure more efficient, thus enhancing integration, promoting economic growth in addition to improving development outcomes.

Because of this and other reasons, Brains Muchemwa, an economist, encourages African leaders, development partners and other key stakeholders in infrastructural development to work on ‘soft’ infrastructure aspects so as to stimulate national, regional, continental and international capital as well as to oil socio-economic systems.

Muchemwa also asserts that more focus should be on ‘soft’ infrastructure issues such as trade facilitation, policy reforms and regional harmonisation of strategies, plans, policies and regulations related to infrastructure, trade and investment.

Gopaldas concurs with Muchemwa and advices African leaders to partner with public and private players plus the development world if countries within the continent are to embrace ‘soft’ infrastructure issues.

“The roles of public-private sectors, governments and development players are vital in creating the correct type of developmental state, which balances various imperatives, particularly in terms of soft infrastructure.

“There is the role of the public sector as well as the role of the private sector. So from the government’s side, obviously, we look to things like good governance, prioritisation and investment in ‘soft’ infrastructure on top of a decent regulatory framework,” adds Gopaldas.

He is also of the view that the private sector should be at the forefront in ensuring that ‘soft’ infrastructure is given the same priority as ‘hard’ infrastructure.

“Inequality is unsustainable, so we have got a situation in Africa were most of our economies are growing in excess of 6 per cent, but over 60 per cent of the population lives under two dollars a day.

“So we are not having inclusive growth and that is fundamentally a problem because over the long run, unless it is addressed, you will have political and social instability, and it is not sustainable. It is, therefore, critical we address the issue of soft commodity,” Gopaldas explains.

Countries in Africa should increase funding as well as embrace opportunities from other sources and development partners if the continent is to exploit several opportunities that exist under the African Union in terms of resources and capacity building and tackle both ‘soft’ and ‘hard’ infrastructure sectors – cornerstones to social and economic growth.

According to the World Bank, 93 billion United States (US) dollars is needed annually if sub-Saharan Africa is to fill its infrastructure gap.