The Africa Finance Corporations report on the state of Africas overall infrastructure development points out the vital importance of this sector to the continents economic transformation but decries what it terms insufficient support by both the public and private sectors.
Investments in this area are critical for building a network of physical infrastructure assets, encompassing both economic infrastructure (such as ports, railways, roads, and airports) and social infrastructure (like schools and hospitals). Despite the demonstrated link between a countrys capital stock and improvements in productivity and living standards, the report shows how Africas total capital stock has seen minimal growth over the past three decades.
The report details how the annual growth rate of Africas capital stock averaged only 1-2% in the 1990s and has been 2-4% since the start of the millennium, in stark contrast to Chinas consistent 10% growth in the area during the same periods.
Although the real value of Africas accumulated capital stock has gradually increased, it remains significantly low at just $10.5bn, compared to nearly $64bn in China by 2019. While Chinas total capital stock was 0.47 times less than Africas in 1960, it surpassed Africas by 1996-1997 and experienced a rapid increase in line with the countrys economic surge from the early 2000s. By 2018, Chinas capital stock was 6.1 times greater than Africas.
The African Development Bank (AfDB) estimates the continents infrastructure gap as being up to $107.5bn a year, while the World Bank estimates that countries need to invest 7.1% of their GDP in relevant infrastructure to meet the sustainable development goals (SDGs). These figures, however, date to pre-Covid times and now probably understate the size of the issue.
