Infrastructure

Infrastructure

The AfDB estimates around USD 35-47bn is needed annually in Africa to spend on road, rail, air and port infrastructure, with most (80%) allocated to maintenance and rehabilitation of existing infrastructure, which has become outdated and inefficient. Globally, investors allocated a record high of USD 85bn to infrastructure funds in 2018, and the positive momentum is expected to continue into 2019 (Source: Preqin).

Road

Road network by region Download the graph PDF (26KB)

Ethiopia is among the countries with the largest need for road infrastructure, with its substantial population and land area. It also has the greatest investment activity, with plans to double its road network by 2020, from 2015 levels, in a bid to improve the time and cost of logistics in the country. Its road network stood at around 100 000km in 2015 and has since increased to 120 000km. The country has completed several projects with the support of Chinese investment. East Africa imports 36% of its products from China, so China stands to benefit from improved logistics in the region. The Addis Ababa – Adama expressway is one such project and is the first of its kind in Ethiopia. Completed in 2014, the financial success of this project, particularly the ability of the investors to generate a good return through the collecting of tolls, could serve as an important precedent for future private sector investment.

A quarter of the Ethiopian government’s annual spending on infrastructure is allocated to roads, and with interest from private sector bidders, several flagship projects are going ahead.

A quarter of the Ethiopian government’s annual spending on infrastructure is allocated to roads, and with interest from private sector bidders, several flagship projects are going ahead. One such project is the 200km Hawassa expressway, estimated value of approximately USD 500m, which has begun construction and will be built in four phases. Each phase was financed separately by a combination of international banks and the Ethiopian government.

The West Africa Trans-Sahara Highway Project, running through Algeria, Tunisia, Mali, Nigeria, Niger and Chad, looks to add or refurbish over 8 000km of roads to the region. The Nigerian and Algerian sections were completed in 2017 and 2018, respectively. However, there are sections within the remaining countries still under construction, and parts of the highway that are in poor condition.

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