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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 

Bankers urge efforts to tackle Africa’s infrastructure challenges      

KIGALI, (Xinhua) -- Top regional bankers are calling on governments to address Africa’s infrastructure challenges stifling regional integration by among others repackaging infrastructure projects to attract funding.

Speaking at the Global African Investment Summit which closed in Kigali on Tuesday, the bankers cautioned that the fruits of integration will not be fully realized without proper infrastructure.

Jonathan Muga, head of Power and Infrastructure Finance (East Africa) at Standard Bank, pointed out that infrastructure financing is most of the times held up by the high risks associated with infrastructural projects.

Currently, he said governments spend 10 percent of the GDP on infrastructure and the significant part of this goes into transport, including roads.

“When it comes to private sector financing infrastructure, we tend to see that the gap between the expectations and the reality is critical. There is therefore a need for governments to restructure the packaging of many projects that require financing from the private sector,” said Muga.

George Negatu, the regional director for Eastern Africa, African Development Bank, said while the East African Community seems better integrated on the continent, poor transmission lines, low access to energy, poor air transport, railways, and road networks are hampering trade competitiveness.

“Unless we are able to get improved regional infrastructure we are not going to achieve what we want,” he warned.

Negatu also noted that high energy costs affect economic integration, limiting productivity of industry in the region.

“This in itself means that companies and industries in the region are not able to reap benefits of the global value chain,” he said.

Negatu faulted the inconsistent or lack of harmonized policies and regulations to allow investments across the region.

There are different policy regimes and regulatory frameworks between countries hence hindering investment, Negatu said, calling for more friendly financial systems that can allow companies to borrow money to invest in long-term investments.

“Non-tariff barriers are also making it impossible for trade to happen. Unless we change this, regional integration will remain a wish,” said Negatu.

The bankers urged regional governments to put in place creative financing mechanisms to address infrastructure development.

Edward George, Head of Group Research at Ecobank, said only one in four people in the COMESA region has access to energy and some of the countries tend to use alternative sources like hydro power which makes it complicated especially when it comes to drought seasons. 

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