Global Infrastructure Outlook: Infrastructure Investment Need in the Compact with Africa Countries, finds that US$2.4 trillion of investment is required in 10 countries by 2040 if they are to keep pace with economic growth and close infrastructure gaps. Only US$1.4 trillion is expected to be delivered based on current spending levels.
Further, of the US$1 trillion investment gap, US$415 billion is required by 2030 if these countries are to meet the UN Sustainable Development Goals (SDGs) for universal access to drinking water, sanitation and electricity.
Outlook forecasts – for the first time – the scale of the infrastructure investment need, current investment trends, and corresponding investment gaps in 10 Compact with Africa countries at a country and sector level.
According to the Annual Global Infrastructure Investor Survey 2017 by the Global Infrastructure Hub and EDHEC Infrastructure Institute-Singapore, 37 per cent of infrastructure investors invest in emerging markets, up from 20 per cent in 2016. Of those already investing in emerging markets, 82 per cent want to increase their investment2.
Global Infrastructure Hub CEO Chris Heathcote said that, “These figures demonstrate a clear desire from investors to spend more in emerging markets. However, attracting private sector investment into African countries remains a major challenge.”
“The key to addressing this is creating the right environment to encourage investors to turn their interest into action,” Mr Heathcote added.
The Global Infrastructure Hub’s newly-updated tool, InfraCompass: Set your Infrastructure Policies in the Right Direction in the Compact with Africa Countries, has revealed that opportunities for improvement lie in governance and the regulatory and institutional frameworks in each of the countries. InfraCompass finds that Morocco and Rwanda are notable performers, marked by improvements to their regulatory quality, rule of law, and investment and competition frameworks.
Mr Heathcote said that partnering with the 10 countries to address these matters would build investor confidence and lead them to fulfil their economic growth potential.
“It’s now more important than ever that emerging markets continue to develop their infrastructure project pipelines, as well as continuing a track record of attracting public and private capital into well-identified, selected and prioritised projects,” Mr Heathcote said.
“As the investment environment in these 10 countries improves, there is a real opportunity for infrastructure investors to deliver impactful projects; providing access to essential services— roads and rail, airports and seaports, telecommunications, drinking water, sanitation and energy— for a large proportion of the population.”
Thierry Déau, Founder, Chairman and CEO of Meridiam, said that the Global Infrastructure Hub has provided much-needed new data that reveals the infrastructure investment gap at a country and sector level.
“As an active investor in Africa, this new data from the Global Infrastructure Hub will help us to identify where needs are greatest and where we as investors can assist in meeting the UN SDGs which are at risk of not being achieved unless we all—investors, governments and advisers—scale up our commitments to the region.”
Philippe Valahu, CEO, Private Infrastructure Development Group (PIDG) agreed.
“Investing in emerging markets is core business for PIDG, having mobilised more than US$15 billion of private sector investment in Africa since 2002, and launching InfraCredit, which has been transformative in emerging financial markets,” Mr Valahu said.
“The Global Infrastructure Hub’s new data reveals the urgent need for much higher investment and the vast opportunity for institutional investors to help close infrastructure gaps and achieve risk adjusted returns.”
The two reports were researched and developed over a six-month period in partnership with Oxford Economics (Outlook) and KPMG (InfraCompass). Both are available in an interactive format on our open access platform at https://www.gihub.org.
Notes to editors
The full Global Infrastructure Outlook: Forecasting infrastructure investment needs and gaps report and online tool can be found at: https://outlook.gihub.org
The full InfraCompass: Set your infrastructure policies in the right direction report and online tool can be found at: https://infracompass.gihub.org
About Global Infrastructure Outlook
In 2017, the Global Infrastructure Hub, in partnership with Oxford Economics, launched Global Infrastructure Outlook to explore how much the world needs to invest in infrastructure at a country and sector level up to 2040. It helps address a lack of detailed information relating to global infrastructure investment.
The most recent update to Global Infrastructure Outlook expands upon the 2017 study and focusses on 10 Compact with Africa countries, aiming to offer an analysis and economic metrics for the level of funding needed to meet their growing infrastructure needs. The report outlines total infrastructure investment needs, current investment trends and the specific investment required to meet the water, sanitation and electricity UN Sustainable Development Goals.
InfraCompass, in partnership with KPMG, is a tool developed to help countries deliver infrastructure more effectively and to provide a robust understanding of a country’s infrastructure market. InfraCompass has been updated to cover 56 countries, including 10 Compact with Africa countries.
InfraCompass is a comprehensive, easy-to-use online database that reveals country infrastructure performances in the categories of:
- Institutions and governance
- Regulatory and competition frameworks
- Permits, licenses, and land acquisitions
- Plan and select
- Delivery and operations
About the Global Infrastructure Hub
Launched in 2014 by the G20, the Global Infrastructure Hub is an organisation dedicated solely to infrastructure in both developed and emerging markets. The global challenge remains acute given population growth, increasing urbanisation, and a need to replace ageing infrastructure. We are helping governments unlock trillions of dollars in private investment to fund much-needed public infrastructure, creating productive economies and more liveable cities. We work with both public and private sectors to facilitate knowledge-sharing, highlight reform opportunities, support the adoption of leading practices and help to build the global pipeline of quality, bankable infrastructure projects. We are independent and provide all our tools and services on an open and free to access platform. For more information, visit: http://gihub.org
About the Compact with Africa
The Compact with Africa was initiated by the German G20 presidency in the Finance Track, endorsed by the G20 finance ministers and central bank governors in Baden-Baden in March 2017, to promote private investment in Africa, including in infrastructure. Central to the Compact with Africa is the concept of mutual commitments to measures and instruments to improve the framework conditions for private investment, including in infrastructure. The aim is to develop comprehensive, coordinated, and country specific investment compacts between individual African countries, international organisations (IOs), and other partners. Investment Compacts will specify measures and instruments to improve the macro, business and financing frameworks.
For more information, visit: https://www.compactwithafrica.org/content/compactwithafrica/home.html
1 The 10 countries are: Morocco, Tunisia, Egypt, Ethiopia, Senegal, Guinea, Côte d’Ivoire, Ghana, Benin, Rwanda
2 The Global Infrastructure Hub and EDHEC Infrastructure Institute-Singapore (EDHECinfra) https://www.gihub.org/resources/publications/edhec-annual-global-infrastructure-investor-survey-2017/