The sports category has moved to a new website.

'Massive' infrastructure spending needed as Africa eyes strong 2018

Growth in Africa rose from 2.2 percent in 2016 to 3.6 percent in 2017 and is likely to rise to 4.1 percent in 2018 and 2019, the ADB said in its annual report, African Economic Outlook.

"Overall, the recovery in growth has been faster than envisaged, especially among non-resource–intensive economies, underscoring Africa’s resilience," it said.

"The recovery in growth could mark a turning point in net commodity-exporting countries," it added.

Last year's spurt has a range of explanations, including a recovery in prices for oil, which helped petroleum exporter Nigeria, Africa's most populous country.

ADVERTISEMENT

East Africa is the most dynamic region in terms of growth: 4.9 percent in 2016, which rose to 5.6 percent in 2017, and to a projected 5.9 percent in 2018 and 6.1 percent in 2019.

However, across the continent job creation did not rise in lockstep with growth, lagging by 1.4 percent.

Woman and young people, aged 15-25, are those who have been most affected by the slow growth in employment.

To generate jobs for the 12 million young people entering its workforce each year, Africa must take a fast-track to industrialisation, the ADB said.

But key obstacles in infrastructure remain, including energy, water and transport, as well as health, education, security and administrative capacity.

ADVERTISEMENT

"The continent's infrastructure needs amount to $130–170 billion (106-139 billion euros) a year, with a financing gap in the range of $68–$108 billion," the report said.

By comparison, only $62 billion was mustered for infrastructure investment in 2016.

To those daunted by the funding gap, the ADB said African countries today had a wide range of options for tapping funds, and these lie "well beyond foreign aid."

One idea is to create an "infrastructure asset" class of investment, in which governments or development finance institutions offer guarantees, using flexible financial engineering, to lower the perception of risk for investors.

Tax reform is also essential, the ADB said.

ADVERTISEMENT

Tax collection is improving in Africa -- it hauled in around $500 billion dollars last year, a figure that compares with $50 billion in foreign aid, $60 billion in remittances and $60 billion in foreign direct investment.

Despite this progress, tax revenue is still below the threshold of 25 percent of gross domestic product (GDP) deemed necessary to scale up infrastructure spending.

"There is an urgent need for better revenue regimes -- including progressive elimination of the vast array of exemptions and leakages that pepper tax systems -- to capture the gains from growth and rapid structural change that some countries are experiencing," the ADB said.

Making these changes will not be "straightforward" given the "intensely political" challenge, the report warned.

ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: news@pulselive.co.ke

Recommended articles

10 African cities with the highest crime index at the start of 2024

10 African cities with the highest crime index at the start of 2024

Machoka at 70: Emotions run high during Citizen TV presenter's birthday [Video]

Machoka at 70: Emotions run high during Citizen TV presenter's birthday [Video]

Diwali 2022: Is Monday a public holiday in Kenya?

Diwali 2022: Is Monday a public holiday in Kenya?

Akothee finally reveals reasons for separating from Omosh 1 month after wedding

Akothee finally reveals reasons for separating from Omosh 1 month after wedding

Man, once a ‘billionaire’, recounts how he lost wealth, now sells his book on streets [Video]

Man, once a ‘billionaire’, recounts how he lost wealth, now sells his book on streets [Video]

Details of Ngina Kenyatta's luxurious restaurant

Details of Ngina Kenyatta's luxurious restaurant

Zero Chills! Jackie Matubia's advice for Milly Chebby amid the unfollow drama

Zero Chills! Jackie Matubia's advice for Milly Chebby amid the unfollow drama

Nigerian royal dignitaries, including four kings and a queen, expected to attend Museveni’s 50th wedding anniversary celebrations

Nigerian royal dignitaries, including four kings and a queen, expected to attend Museveni’s 50th wedding anniversary celebrations

10 African countries with the strongest military power in 2024

10 African countries with the strongest military power in 2024

ADVERTISEMENT