Can South Africa And The Au Make The G20 A Key Partner?

This week two seemingly unrelated Africa-focused events are taking place. First, the African Union AU will host the 8 th Program for Infrastructure Development in Africa PIDA conference, and second, South Africas Presidency of the G20 or rather the G21 as I believe it should be called now that the AU is part of the group will begin. The reason they are related, however, is that these present an opportunity to put addressing Africas urgent infrastructure development needs high on the global agenda.

This is necessary. To achieve 2030 SDGs and the AUs Agenda 2063, our own analysis of 13 African countries estimates a 108.9bn 149.9bn annual financing gap for these countries to collectively build enough infrastructure to meet just the basic UN Sustainable Development Goals. By African Development Bank AfDB estimates, the continent needs about 86.7bn of external finance per year to achieve Agenda 2063 goals - 76 of which the AfDB say should target infrastructure, highlighting its huge impact on the continents resources.

Yet, in an upcoming report by our firm, analysing the top infrastructure financiers on the continent, we find that African governments themselves contribute about 38 of the continents infrastructure finance, making them the largest contributor, not external financiers. In addition, Africas own regional banks such as the AfDB, the Development Bank of Southern Africa, and the West African Development Bank contribute about 8 of the continents infrastructure finance.

That means that the continent itself funds about half of its own infrastructure. So, who else has been supporting African countries and institutions in infrastructure finance? Has the G20 played any role?

Given its own infrastructure-led development model, it wont surprise many to know that of the G20, China has been the continents largest infrastructure development partner over the last 20 years. About 87bn or 8 of Africas external debt is currently owed to China, the bulk sourced as bilateral loans for infrastructure on the continent. African countries have been able to secure over half of Chinese loans from the China Export-Import Bank, the countrys only concessional lender. However, at least 30 other financial institutions in China have played a part in Africas infrastructure development, with funds sourced at both concessional and commercial rates.