SADC must invest in sustainable infrastructure

Lazarus Sauti

Director of Transport Management Division in Zimbabwe’s Ministry of Transport and Infrastructural Development, Allowance Sango, says lack of investment in sustainable infrastructure is a frustrating feature of business in the Southern African Development Community (SADC), holding the region back.

“There is a huge demand for infrastructure in SADC countries. Sadly, financial challenges are stalling infrastructure projects. Most governments in the region do not have adequate financial resources to invest in sustainable infrastructure. To make matters worse, money coming from donors and governments is not sufficient,” he said.

Sango added that member-states in the regional grouping need to close infrastructure gaps to facilitate increased intraregional and international trade, reduce the cost of doing business, become more competitive within itself and in the global economy, unlock quality growth for the bloc as well as to act as a catalyst to Africa’s economic transformation and diversification through industrialisation and value addition and sustainable and inclusive growth.

“Infrastructure is the great enabler of development – it enables social, economic and technological growth and, as a result, is the bedrock for better living conditions. Accordingly, countries in Southern Africa need to invest in sustainable infrastructure if they are to grow and develop their social and economic fabric,” he said.

Sango again: “The costs of closing the region’s infrastructure gap are vast. As a result, government sectors in the region need to look at innovative ways to close this gap, including improved cooperation as well as engaging in more public-private partnerships (PPPs) – contractual arrangements between a public agencies and private sector entities.”

To tackle poor roads and a lack of electricity, sanitation and water, intellectual capital as well as digital communications, Sango also believes governments in Southern Africa must mobilise tax revenues and external finances needed to underpin public investment, an idea supported by Dr Steve Kayizzi-Mugerwa, acting Vice-President and Chief Economist of the African Development Bank (AfDB) – a multilateral development finance institution established to contribute to the economic development and social progress of African countries.

“Government sectors in Africa can do more to finance their own infrastructures, through taxation, for instance, and to make sure that the infrastructure built is effective and well maintained, as well as to ensure that people, especially in the rural areas, benefit from these developments,” noted Kayizzi-Mugerwa.

Emmanuel Nzabanita, electric engineer and Zim-Fund manager with the AfDB, says SADC governments can also boost available infrastructure funds simply by increasing tax revenues.

“Increasing tax revenues and stimulating private and public savings are crucial measures for meeting SADC’s infrastructure challenge, together with finding new and innovative financing sources,” he noted.

Sango, however, says SADC countries, instead of thinking global, need to think local and court the support of private sector players – key actors in infrastructure development.

“To successfully invest in sustainable infrastructure sectors such as energy, transport, digital communications, water and waste as well as intellectual capital, we need to open up our borders and think locally,” he said, urging private sector players to increase their participation in the development of sustainable infrastructure.

“Traditional resources from public sector players and development partners are limited and could not fully cover the infrastructural needs of SADC countries. Consequently, SADC countries must mobilise private sector financing to support infrastructure developments,” he said.

Neside Tas Anvaripour, a Turkish-American and the Director of Africa50 – the continent’s largest and most important infrastructure delivery initiative, says Africa needs US$100 billion for infrastructure, and such cost is beyond the financing capacities of governments or even donors.

Consequently, she believes the only alternative panacea to this challenge is attracting private sector participation through public-private partnerships.

Although Mcebisi Hubert Jonas, the deputy Finance for South Africa, urges SADC countries to use public finances for infrastructure development, he advises that the process should be guided by legal and policy frameworks.

“African governments can boost available infrastructure funds both by reforming their domestic tax systems and by making their banking systems more competitive, but importantly, the process should be guided by legal and policy frameworks,” he said.

Kayizzi-Mugerwa also says any investment in sustainable infrastructure must cover both rural and urban areas.

However, he said more emphasis needs to be placed on urban development, particularly what goes underground, as the urban infrastructure often does not take into account the impact of building upon the drainage, sewage systems, and water systems.

“In a lot of cities in Africa today, when you have one day’s heavy rain, everything’s flooded. That never used to be the case. It is a new phenomenon. If African cities are to be places of advancement, this infrastructure needs to be revisited,” he affirmed.

Sustainable infrastructure is the foundation upon which an economy operates – it offers investors the opportunity to own utilities and facilities that provide essential services and helps drive socio-economic growth and productivity.

Accordingly, leaders in the SADC region must have the political will to invest in sustainable infrastructure; and to be successful, they need support for both public and private sector players.