Transparency, timelines crucial for investors in Africa infrastructure

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Somerset West – Transparency is paramount for potential investors in infrastructure development projects in Africa, according to David Walker, managing director and head of public sector group for Europe, Middle East and Africa at Citi.

Apart from transparency, clarity of who is doing what and of investment timelines are very important to the bank’s client, he said at the First African Roundtable on Infrastructure Governance, which took place in Somerset West on November 2 and 3.

The bank’s investors also want to know that civil engagement took place about public sector infrastructure projects.

“They do not want to see a lack of alignment on the ground – for instance across borders or among different stakeholders,” he explained.

The investors usually prefer to invest in actual infrastructure rather than at the development stage.

“The more certainty that can be created, the more willing they will be to invest,” said Walker.

“Financial transparency attracts more players and lead to more investable projects. In infrastructure development in Africa there is an opportunity to create a new growth asset class.”

According to Thomas Barrett, chair of the OECD Infrastructure Forum, there is a need to manage expectations.

“At this scale (of public sector infrastructure development) we are talking about generational level investments. Good, long-term planning is, therefore, very important,” he said.

These kinds of projects can take decades to complete from the planning stage. It must, therefore, be able to survive normal changes in government of a country.

“Investors’ attitude is that fiscal risks – both to government as well as the investor – must be well identified beforehand,” he said.

Siphokazi Mthathi, executive director of Oxfam SA, agreed with Walker that transparency is an important aspect to address.

“People must be central in the infrastructure development process. This cannot be stressed enough,” she said.

“It is not just about pouring money into a problem. We also have to ensure infrastructure is built well and delivers what it was meant for. When there is a lack of infrastructure, women in Africa are the most impacted and shoulders most of the burden.”

For Elias Masilela, executive chair of DNA Economics, political leadership is needed in the process of infrastructure development in Africa. It should also not just be about “fancy engineering” in his opinion, but include a social aspect to become an equaliser in terms of gender and geographical distribution.

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