Grader at work in Bronkhorstspruit. Picture: SUPPLIED

THE infrastructure challenge in Africa remains immense and the Development Bank of Southern Africa (DBSA) has an important role to fulfil in meeting this challenge. Current World Bank estimates of the infrastructure investment required annually across Africa are in the order of $93bn, with investment at around $45bn, leaving a considerable shortfall. It is estimated that Africa will require between $180bn and $230bn in infrastructure investment by 2025.

Africa’s population of 1-billion in 2010 is expected to double by 2050. As a result, the workforce is expected to increase by 910-million people by 2050, of which 830-million will be in sub-Saharan Africa and 80-million in North Africa. Addressing the infrastructure gap therefore remains critical to allow new higher-productivity sectors to develop, generate jobs for the rapidly growing young population and foster integration into global value chains.

The poorest Africans are largely dependent on agricultural resources for food and jobs, and climate change-related hazards pose serious welfare challenges for sub-Saharan Africa’s rural poor. Furthermore, pressure on already limited water supply is expected to increase sharply due to changes in water cycles caused by erratic rainfall. It is therefore highly likely that climate change could lead to mass migration and rapid urbanisation, which in turn would impact on human settlements and their supporting infrastructure. It is critical that infrastructure development must occur in a manner which promotes sustainable consumption, production and management of natural resources to support the needs of the present and future generation.

The DBSA has a clear mandate from governments, with its primary purpose to promote economic development and growth through its involvement in preparing, facilitating, funding or delivering effective development projects and programmes.

The outlook for the global economy is dominated largely by the developments in China, as the world’s second-largest economy continues to lose its strong growth momentum. This is expected to sustain the subdued commodity prices that are crucial for macro-economic stability in most sub-Saharan African countries.

Without sound and well-maintained infrastructure, national economic development will remain severely constrained. Improvements to the continent’s infrastructure in recent years have been responsible for more than half of Africa’s better economic performance and have the potential to contribute even more in the future. By the same token, inadequate infrastructure holds back faster growth on the continent.

To meet this challenge, the Sustainable Development Investment Partnership (SDIP), a global public-private partnership initiated by the OECD and the World Economic Forum, was established. It aims to mobilise $100bn in financing over the next five years for infrastructure projects in developing countries. The SDIP Africa Hub, chaired by the DBSA, will co-ordinate African regional activities of the initiative through blended finance, an innovative approach to development finance that combines funding from private investors and lenders, governments and philanthropic funds.

The SDIP Africa Hub will help to accelerate the engagement of SDIP members on the continent. Membership has grown from 20 institutions when it began in September 2015 to 30 today. There are four focus areas: deal pipeline; energy projects; government engagement and local currency, and the priority is to implement activities that will lead to a larger volume of successful transactions.

Mobilising international private and donor capital will give DBSA a unique opportunity to partner and collaborate with various organisations around infrastructure development in SA and the continent.

Despite the heavy investments already made, more solutions to support the planning, preparation, financing and implementation are required to address the infrastructure deficits.

In SA, linked to the National Development Plan is the Integrated Urban Development Framework, which is designed to unlock the development synergy that comes from co-ordinated investments in people and places. An integrated urban infrastructure policy framework that is resource-efficient and provides for universal access and more inclusive economic growth needs to be extensive and strong enough to meet industrial, commercial and household needs, and should also be planned in a way that supports the development of an efficient and equitable urban form and facilitates access to social and economic opportunities.

To ensure that SA fulfils its obligations in relation to support for infrastructure development in the region’s development corridors, the DBSA will continue to support initiatives such as the SDIP, the SADC Integrated Infrastructure Development Plan, the Programme for Infrastructure Development in Africa and Africa 2063, which are led by the African Union Commission, the Nepad Secretariat and the African Development Bank Group.

• Dlamini is CE of the Development Bank of Southern Africa.