“Africa holds great potential for growth in intracontinental and global trade. These expectations require transportation and logistics infrastructure to realize, which is currently grossly inadequate. Efficient transportation infrastructure is critical to trade as it connects physical and human resources to locations where they create the most economic value”
REUEL ANDREWS – Director, Transport Infrastructure
In the last decade, there have been notable efforts to improve transportation systems and trade connectivity by governments, development finance institutions (DFIs) led mainly by the Africa Development Bank and the private sector. However, given that African governments are constrained by limited resources, the recent approach has been more towards enhancing the economic environment to attract private sector capital into infrastructure development. In essence, DFIs are bridging the divide between government’s development impact objectives and the private sector’s return-on-investment objectives, while also taking the lead in environmental and social responsibility.
Over 70% of the world’s biggest consumer goods companies are already operating in Africa, and a number of large multinationals are investing in the region, providing a key opportunity for the transport and logistics sector. In concert with governments, DFIs and private sector investments greater progress can be made, building on more recent momentum in the space.
Private participants, principally financial institutions and strategic investors, have demonstrated increased appetite for transport infrastructure investments, both as debt and equity, influenced by the growing prevalence of the project finance structure. Private equity infrastructure funds have also been growing in participation and relevance in this space.
The DFI community, including the AFC, continues to play the important facilitation role by becoming more and more involved in projects at the early stage of development. This ensures that by the time a project comes to the market, it has a bankable set of project documents, appropriate environmental and social considerations have been accounted for and the regulatory framework is in place to undertake such transactions.
AFC’s transport and logistics projects include:
- Henri Konan Bedie Bridge in Cote d’Ivoire
- Ethiopian Airline Expansion
- Bakwena Toll Road in South Africa
- Ghana Airport Company
- Port d’Abidjan
- Financial Adviser to Nigeria Sovereign Investment Authority (NSIA) on the Second Niger Bridge
- Gabon Special Economic Zone (GSEZ) now rebranded as ARISE
Read more about our activity in this sector during the year in our annual report.