“The private sector is waking up to the opportunities”

Bobby J. Pittman

Global: The Infrastructure Consortium for Africa states that an annual investment of $93 billion is needed in Africa each year if the continent is to bridge the infrastructure gap with other developing regions. Where is this money going to come from?

Bobby J. Pittman Jr: Those numbers are there, we certainly use them; we’ve been part of computing them, but we cannot focus only on the global volume needed. There is nearly $60 billion [in investments each year]. But I can tell you that I don’t like framing the discussion on infrastructure like this. I don’t like starting with a deficit and a gap, as if we’re still in the stage of going to donors and asking them to fill the gap.

The flip side is that there are successful businesses right now across Africa that are paying 45 cents a kWh using diesel generators. So if you want to invest in power in one of those countries and you can invest in a project that produces power for less than 45 cents a kWh, there are companies who are profitable who will pay you for that power because it’s less than what they are paying now.

I like to look at some of the statistics that people think of as a bad thing and think that’s how big the opportunity is. The fact is that some of the poorest families on less than $1 a day in some of the poorest neighbourhoods in Africa are paying for clean water – in fact, they’re paying more than you and I pay for water.

Are you saying that there are good opportunities for the private sector to invest in infrastructure in Africa?

The opportunities are immense and I think the private sector is waking up to that. The local private sector across Africa has already woken up to it and a lot of people, frankly, are making a lot of money. We are doing infrastructure deals on commercial terms – no government guarantees, no donor financing – and the results are really great.

I think we are at the beginning of a big boom so on this $93 billion, the bigger question is: Is it only going to be $93 billion and is it going to always be government funded and donor funded? I actually think there is a chance for the private sector to come in and move out donors, move out governments.

The AfDB recently announced an urban development strategy, one of the key pillars of which is infrastructure. Could you tell us about the strategy and how it relates to infrastructure?

The Urban Development Strategy is one of a number of strategies that we’re working on right now with the recognition that across Africa, cities are growing. Really it’s a question of engagement with our clients [African countries] and working out how best to manage and optimise those trends. Certainly, we are looking at transport, transit, power grids and water – which is done in a very different way from what we do in the rural areas. In rural power we do a lot of small solar, small hydro installations but with large concentrated solar, the pricing doesn’t make as much sense from an urban perspective so we look at some other options and work with local authorities and local utilities to optimise these trends in urbanisation.

Does the AfdB have any specific infrastructure projects in urban areas?

A lot, depending on the country. We have a number of urban water projects – one in Liberia and one in the DRC [Democratic Republic of Congo]. Then, of course transport – our new road surrounding Nairobi is hopefully going to alleviate a lot of the urban congestion and take away some of the trucking that right now needs to go through the city. So we are both alleviating the urban traffic and making sure that trade routes get bolstered.

About the author:

Bobby J. Pittman is the Vice-President of Infrastructure, Private Sector and Regional Integration for the African Development Bank (AfDB).


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