The lines were drawn across a giant map of Africa at this gathering of the great and the good in business, in Cape Town. The expensive business of pouring billions of dollars into making these lines on a map into trade routes plied by high-speed planes, trains and trucks, will make-or-break of the African dream.
More than 1,000 delegates arrived at the World Economic Forum (WEF) in Cape Town, on May 9, to discuss the practicalities of building infrastructure to nurture the emerging economies of Africa. It is a herculean task, to say the least, with the World Bank estimating the continent needs $93 billion to complete the job. Experts say the cost may be much more.
Plans have been drawn up for trade corridors traversing the continent. They include: a swifter trade route between oil-rich Angola and South Africa; plus, an ambitious plan to improve the rails, roads, ports and airports between Cape Town and Cairo—a dream that is likely to have the old colonialist, Cecil John Rhodes, chuckling in his grave in the Matopos Hills, near Bulawayo in Zimbabwe.
“It is ironic that democratic African nations, that have turned their back on colonialism, are trying to revive a plan hatched by the colonialist Cecil Rhodes more than a century ago,” says Ebrahim Patel, South Africa’s economic development minister.
To execute these plans, experts have drawn up a list of 50 priority projects that will be whittled down to 15 in the next six months. They include the expansion of the Grand Inga Dam hydroelectric plan in the Democratic Republic of Congo and the boosting of infrastructure to help extract gas from the waters off the coast of Mozambique.
“It is a wonderful vision but getting it done is something else,” says Nick Chism, the global head for Infrastructure at KPMG, who has been studying infrastructure worldwide for 20 years.
Chism believes a shortage of skills and finance are likely to be among the biggest hurdles. He also warns there could be tension between nations, before the list of 15 projects is decided, over what is built where.
“The idea is to build infrastructure in hubs, that is, a good airport in one country, a good port in the neighboring country and so on. As you can imagine, each country wants the best of everything built in their own backyard,” says Chism.
Despite these warnings and the dismissal by critics of WEF as a mere talk shop, there was optimism among the millionaires, entrepreneurs, technocrats and government officials, who gathered in Cape Town.
“I think things are starting to gel. We are in a lot better space than we were a decade ago,” says Trevor Manuel, South Africa’s minister of national planning.
Money, in a shallow world capital market, is likely to be the most insurmountable object. But Nigerian entrepreneur, Tony Elumelu, who invested recently in a $300 million power plant at home and put money into the launch of Rwanda’s new commodity exchange, sees hope.
“The best of Africa’s entrepreneurs are seeking investment opportunities in the continent… If we invest in Africa, we will get others to follow,” says Elumelu.
Folorunsho Alakija, reputed to be the richest woman in Africa, with a personal fortune, estimated by FORBES, of $600 million, has made her money through the license to the rich Agbami oil block off the coast of Nigeria. The block has 1.2 billion barrels of oil.
“We shouldn’t be waiting for handouts from other countries; we should get together to make our way forward, by ourselves, to give our people pride… There are plenty of opportunities in agriculture. Nigeria is importing so much rice. I do not think we should be importing anything from anyone,” says Alakija.
If optimism were cash, Africa’s infrastructure problems could be sorted before WEF reconvenes in Nigeria in May.
As it stands, there is a lot of fund raising and tough talking to be done. Cautious investors from New York to Beijing have to be won over. Despite the promise of returns of more than 20%, this is likely to be a hard sell. Africa is rising with an average growth rate of 5% at a time when the rest of the world is at a standstill. Few at this annual talk fest could disagree that the economies are moving, but finance needs to keep pace.