The Auda-eu Report On Infrastructure Finance

Infrastructure development in Africa has long been a critical issue for the continent's growth and sustainability. In February the African Union Development Agency New Partnership for Africa's Development AUDA-NEPAD and the Africa-Europe Foundation, in partnership with the African Climate Foundation, released a comprehensive report on infrastructure finance in Africa that has attracted significant attention, particularly for the insights of Nardos Bekele-Thomas, a key figure in African development. As the chief executive officer of AUDA-NEPAD Bekele-Thomas has been instrumental in shaping the agency's approach to development, and her leadership and strategic direction played a key role in the findings and recommendations of this report.

The AUDA-EU collaboration stems from a shared commitment to addressing the infrastructure gap that hampers Africa's economic and social development. Infrastructure, in its various forms - energy, transportation, water, and digital connectivity - is the backbone of any economy. However, Africa faces significant challenges in financing large-scale infrastructure projects. According to the report, these challenges are exacerbated by limited domestic resources, insufficient foreign investment, and a lack of technical capacity to plan, prepare and execute. The preparation stage is critical as this is where the bankability issue, which often hinders private sector finance, falls.

Bekele-Thomas is steering AUDA-NEPAD towards fulfilling its assigned mandate as the implementing agency of the African Union Agenda 2063. Under her leadership, AUDA-NEPAD has positioned itself as a central player in mobilising resources and guiding African countries toward self-reliance in infrastructure development.

Africa's infrastructure gap is estimated at 130bn to 170bn annually, with only about 80bn being invested each year.

African governments contribute over 40 of total infrastructure finance. However, despite these efforts, they can only address a fraction of the total need. The role of donors, accounting for 35 of total commitments, has been significant but is on the decline, particularly as China's involvement in Africa grows. China's financing, particularly through loans, is reshaping the landscape of African infrastructure, providing a model that offers lessons for Western funders.