Infrastructure playing major role in Africa’s economic growth

Opinion and Analysis

Road construction. H Young undertakes major infrastructure projects. PHOTO | FILE 

By GEOFFREY MABEA

Infrastructure contributes to more than half of Africa’s recent improved growth performance. The focus on improving infrastructure contributes towards economic growth and militates against human underdevelopment.

According to Oxford Economics, worldwide infrastructure spending is expected to hit as high as $9 trillion per year in Africa by 2025, whereas $78 trillion is projected to be spent globally between 2014 and 2025.

PwC’s recent ‘Infrastructure Spend Review for the Sub-Saharan African Countries’ publication estimates a portfolio increase at an annual average of 10 per cent through to 2025 translating to much over $ 180 billion per annum by 2025 is expected.

A key component to have in mind is how these infrastructure projects can be adequately funded and an ideal procurement model adopted; for example, the adoption of the PPP’s funding models, disposal/privatisation, or the traditional procurement models.

Kenya has undergone a quiet revolution and an accelerated approach in putting in place structures to implement landmark projects.

The development of these mega infrastructures has a correlation with human capital and economics; that is, state-of-the art infrastructure leads to rich human capital development and contrariwise.

Spending

As Kenya is poised to become one of the top five fastest-growing economies in Sub-Saharan Africa, an estimated growth rate of six to seven per cent in the next three years according to the World Bank estimate is likely to be attributable to the current accelerated infrastructure spending.

With proper project management of the various sectorial investments we anticipate significant economic growth thus providing jobs and delivery of vital services.

The successful delivery of these projects depends on how well the project components are prioritised and sequenced, a suitable procurement model, and functional project governance is enforced.

Additionally, multi-sectorial projects will require a well-established project portfolio and optimisation management approach.

This is a systematic and structured process of selecting the right projects to form the organisation’s capital investment portfolio, in terms of their strategic alignment, return on investment and deliverability risk, and then managing the portfolio so that it always remains in balance.

A successful programme for mega projects should have structured controls around cost, planning, change, information analytics and risk management. This will in turn provide strategic insights with quantity-based reporting and Earned Value Management (EVM).

Mr Mabea is manager, Capital Projects & Infrastructure at PwC Kenya.