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What benefits may arise from establishing critical infrastructure in Africa?

Posted By Sarah Skidmore, Monday, June 15, 2020

Sarah Skidmore, a member of our Emerging Fellows program publishes a blog post full of entrepreneurial questions on Africa. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

The past fifteen years have been marked by notable advancements in infrastructure systems throughout the continent. Yet critical infrastructure problems with energy, transportation, and water still exist for millions of Africans. Looking at the contemporary history of infrastructure investment, African governmental leaders have dedicated finances to buildout. They have also growingly accepted foreign investment (particularly from Chinese investors) to fund projects. Though foreign investment is not new and certainly not a 2020 discovery, the repercussions the African people might experience due to foreign indebtedness over the next three decades must not be overlooked.

 

As foreign investors continue to support infrastructure projects in Africa, at what point might the magnitude of foreign indebtedness reach a tipping point for the African people? With infrastructure projects totaling over two trillion in dollars slated for the coming years, how might funding decisions by African leaders today impact the lives of the African people in the next three decades? Do current funding decisions allow for long-term sustainability or rather burden the African people with a catastrophic debt?

 

Debt financed infrastructure investment is often the default standard practice. Over recent decades international investors and private equity funds have canvased infrastructure projects throughout the continent. From an international investor perspective, Africa is a haven for risky yet lucrative financial returns. Public Private Partnerships (PPP), like Africa50, is another means of infrastructure investment in which the African government works alongside the private sector. What do the African people gain from these multi-billion dollar financed endeavors? Or rather, what are the African people potentially losing in decades to come as they are saddled with enormous debt? How does billions of dollars in debt allow for unlocking the potential of Africa by 2050?

 

At what point might the African people opt for a different approach to infrastructure development? At what point may a bottom-up movement from the African people overcome the top-down approach currently used by African leaders? How might a more localized, micro-development approach to infrastructure development better fuel African entrepreneurialism opposed to large-scale macro-development infrastructure projects?

 

Consider what a bottom-up approach to development may look like. Energy is an essential starting point. Imagine the power that accompanies capturing and creating energy locally – everything from running sanitation systems, to supporting humanitarian efforts, and even to promoting educational initiatives. As oil and gas discoveries in East Africa attract international industry, micro-grid electricity offers localized opportunities for the African people. Micro-grids for instance offer a sustainable and clean approach to fueling rural infrastructure needs throughout the continent. How might localized micro-grids impact a farm owner, a restaurant owner, or even an entrepreneur?

 

There is no denying that Africa is in need of infrastructure development. After decades of unsuccessful top-down to development, what benefits may arise from shifting toward a bottom-up approach? What benefits may local communities, their economies, and their entrepreneurial initiatives experience with a bottom-up approach? How might the next three decades be different than the past five decades if a bottom-up approach to infrastructure development replaces the top-down approach so prevalent throughout the continent?

 

As the African people are projected to hold 25% of the global talent in 2050, activating local and sustainable solutions when establishing critical infrastructure sets Africa on a new trajectory. A trajectory that empowers local entrepreneurship and leverages local talent all the while establishing critical infrastructure. How might altering the current approach to infrastructure development shift from a future of unsustainable debt toward a future of sustainability? A future where the African people are thriving and unlocking potential?

 

© Sarah Skidmore 2020

Tags:  Africa  development  entrepreneurship 

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