SWAKOPMUND, Namibia — Creating local jobs, promoting transnational corridors to increase the mobility of goods and services, and developing innovative ways to finance infrastructure projects were top talking points at the annual Programme for Infrastructure Development in Africa, or PIDA, Week.
In a quaint town nestled between the dunes of the Namib Desert and the Atlantic Ocean, some 300 development experts gathered in Namibia last month to enhance existing partnerships and emphasize the local job creation potential of regional infrastructure projects. Attendees from across the continent met with international stakeholders to reinforce commitment to continental infrastructure priorities.
Under the theme “regional infrastructure development for job creation and economic transformation,” the December gathering drew representatives from the private sector, national governments, the African Union Commission, the European Union, the New Partnership for Africa’s Development, the African Development Bank, Power Africa, as well as the Japan International Cooperation Agency, among others, discussed the priority of filling Africa’s infrastructure gap to deliver power and improve mobility. Experts exchanged technical advice and project owners rallied financial support.
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“The question of mobility in general, not just human mobility, but the mobility of goods and services is a fundamental basis of development,” AUC director of infrastructure and energy, Chiekh Bedda, said during a press conference. “And if you take the case of our European neighbors, Europe is an integrated continent today because they thought very early on about infrastructure and, in particular, corridors.”
Corridors include more than just highways, he said, and extend to include transmission lines and a single air transport market for the mobility of goods and services. Embracing digitization, he also argued, would substantially reduce complications due to traffic.
Adding jobs to local economies
The African Union estimates that 300 million youth will enter the labor markets by 2030. However, it remains a tremendous challenge for the continent to integrate these young people into national workforces. The disconnect between current capacities and skills in-demand has been broadly recognized, prompting the AU’s designation of 2017 as “the year of harnessing the demographic dividend through investments in youth.”
The PIDA partnership developed by AfDB, NEPAD and AUC also focused on job creation as the highlight of its annual meeting. The three-day event included knowledge sharing, technical guidance, and candid dialogue among attendees.
A specific day during the conference was dedicated for investors and African infrastructure developers to make remarks on the bankability and progress of five priority projects for the coming year. The projects range from the Abidjan-Lagos corridor, a 1,028 kilometer highway spanning five countries to a toll bridge connecting Congo-Brazzaville and the Democratic Republic of Congo; and a Zambia-Tanzania-Kenya power connector. Countries representing these transnational projects shared lessons learned and persisting challenges.
In total, an estimated 1.5 million jobs are expected to be created over the lifespan of these regional infrastructure projects. However, Anna Waldmann, PIDA program head of infrastructure for German-based GIZ, said current infrastructure skills gaps must be addressed.
“Sometimes we don’t reap the full potential because products or labor are imported from elsewhere, or projects are not designed and planned in ways that would benefit the community most,” Waldmann told Devex during PIDA Week.
As a technical partner, GIZ helped the group develop a job creation toolkit to estimate the labor market effects of PIDA projects. Their methodology also covered the various type of jobs to be created via infrastructure projects, including direct, indirect, and secondary employment.
Bedda agreed that countries must build local capacities and push for increased knowledge transfer from international partners.
“We have to be honest. We cannot fully deliver for our operations today in Africa because we don’t yet have all needed skills,” Bedda said. “The question is about how can we give local companies the opportunities to learn from others during this period and encourage them so that in the program’s second phase, more local companies are directly involved in project implementation.”
Improving project preparation
Inadequate project preparation can also prove to be another bottleneck to the successful deployment of regional infrastructure projects in Africa.
Waldmann said GIZ’s approach is to strengthen the technical capacities of the African Union and NEPAD to fulfill their mandate as the steering and facilitating organs for PIDA implementation by designing clear products that they can offer to the regional economic communities and national project owners. One such product that helps drive projects forwards is the service delivery mechanism for early stage project preparation.
“The result is that by now the ministers of the five project states of the Abidjan-Lagos corridor have adopted the institutional and legal setup of a ‘corridor authority’ which was quite a complex process to agree on an institutional and legal setup of a supranational authority which would be the first of its kind for the transport sector in Africa,” she explained.
“Another challenge we are facing is that private money doesn’t go into project preparation, so that’s another constraint,” remarked Symerre Grey-Johnson, head of strategic business infrastructure and resource mobilization for NEPAD.
In 2005, the NEPAD-Infrastructure Project Preparation Facility was created to promote the development of investment-ready projects. This is done by providing grants and expertise to help countries, regional economic communities, and specialized agencies to prepare viable and bankable projects in energy, transport, ICT, and transboundary water resources.
“We are taking a rather passive role as it corresponds to our position as a strategic partner,” explained Francisco Carreras, the head of cooperation for the EU delegation to the AU. “We, of course, have a vested interest in the development of Africa and we are ready to support, but projects are at different stages of maturity, so we cannot intervene to finance a project which is not mature enough,” he said. “We are happy to be here and listen to these investment proposals and contribute to the ones that are at a mature stage.”
To involve the private sector in PIDA implementation, a continental business network provides a platform to share de-risking recommendations for PIDA projects. The latest initiative out of this is the 5 percent agenda, a campaign to increase pension and sovereign investment into Africa’s infrastructure from the current 1.5 to 5 percent within five years.
PIDA enters Phase 2 in 2018
To date, 30 percent of PIDA’s 51 cross-border infrastructure projects are completed or in construction. With a third of all projects in progress, another 20 percent under close tendering and an additional 20 percent under preparation, Waldmann said given the scope and complexity of these large infrastructure projects, these figures illustrate the great advancements being made.
“Before PIDA, there was no continental framework on infrastructure development and this prioritization of key projects is absolutely needed if we want to advance the continent in terms of transformation, in terms of integration. PIDA Week where people come together to discuss strategies, discuss policies and spark cooperation is a success,” Waldmann said.
However, she said implementation is still too slow. “These are successes that have to be built upon,” Waldmann said.
With African states agreeing on priority projects and the PIDA platform providing key technical assistance, policy advice, and financial support from international experts, experts told Devex that phase two will hopefully include more local contractors and higher political engagement to advancing agreed priorities.
Going into the second phase of the PIDA mandate, Grey-Johnson said things are more in order, with a vibrant set of instruments and dedicated team. “The second phase will look at more technical advancements, more technical experts at the regional economic blocs following up on the ground with the project owners and expanding the NEPAD staff to have more transactional advisers, more financial advisers, statisticians, because we have passed a certain stage and what we need now are these people.”