Improving the Infrastructure in Africa

Project description

Title: Support to the Programme for Infrastructure Development in Africa (PIDA)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Member states of the African Union
Lead executing agency: African Union Commission (AUC)
Overall term: 2018 to 2021

Context

In Sub-Saharan Africa, poor infrastructure cuts national economic growth by 2 per cent every year and reduces productivity by as much as 40 per cent. Currently, only 38 per cent of the African population has access to electricity, less than 10 per cent is connected to the internet and only 25 per cent of Africa’s road network is paved. The financial gap to provide these outstanding infrastructure services amounts to 130 to 170 billion US dollars per year. To address these challenges, the African Heads of State and Government adopted the Programme for Infrastructure Development in Africa (PIDA) in January 2012 as the continental strategic infrastructure framework set to run until 2040. Agenda 2063, the African Union’s (AU) strategic framework for the socio-economic transformation of the continent over the next decades, identifies PIDA as the key strategic framework for the development of regional infrastructure – 5 of the 12 flagship programmes of Agenda 2063 are PIDA programmes and related to infrastructure. Therefore, PIDA is a critical programme for the AU to assist Member States in contributing to a prosperous, integrated Africa, based on inclusive growth, sufficient and adequate jobs, and sustainable development.

The first PIDA Priority Action Plan (PIDA-PAP), 2012 to 2020, comprises 51 cross-border programmes covering transport, energy, information and communication technology (ICT) and transboundary waterprojects.

Objective

The African Union Commission (AUC) and the African Union Development Agency (AUDA-NEPAD) receive support in making future plans for urban infrastructure. The private sector is increasingly involved in improving the infrastructure in African countries.

Approach

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH provides technical support to the infrastructure departments of the AUC and the AUDA-NEPAD in the following four components:

Integrated Infrastructure Corridors: Development of a Multisectoral Infrastructure Corridor Approach. The corridor approach serves as the basis to ensure that future cross-border. infrastructure planning connects the sectors of transport, energy, water and ICT to deliver integrated infrastructure delivery and to better facilitate the creation of Special Economic Zones, Logistics and Manufacturing hubs etc. GIZ supports the development of the PIDA corridor approach which planning and implementation should also be gender sensitive, employment oriented, environmentally friendly and connect rural areas. This process includes the establishment of an African Women for Infrastructure Network.
Africa’s Future Priority Infrastructure: Formulation and Planning of PIDA-PAP 2. GIZ advises on the coordination and technical review process to select Africa’s priority regional infrastructure projects that will improve access to transport corridors, water & energy supply and internet connectivity. For example, selected projects shall contribute to regional socioeconomic development, intra-African trade, Agenda 2063 and the Sustainable Development Goals.
Early Project Preparation: The PIDA Service Delivery Mechanism (SDM). To improve the quality during PIDA project preparation and the prospects for a bankable project pipeline, the SDM provides technical advisory services to project owners. This mechanism for example assists with investability screenings, local labour market analysis, facilitation of regional agreements between project countries etc. to eventually afford projects a better opportunity to attract funding so that feasibility studies can begin. This process is assisted via the PIDA Quality Label to be certified to projects that excel in project preparation according to a set of predefined technical criteria. The Expert Service Pool deploys infrastructure experts (e.g. sector specific, financial, legal) to projects on demand basis for technical advisory services within the SDM. The SDM was established in 2014 to address the lack of capacity for early stage project preparation at the national and regional level.
Private Sector Engagement: The PIDA Continental Business Network (CBN): The CBN was established in 2015 as a private sector network to communicate recommendations to the public sector and to improve the investment climate for infrastructure finance. One of the CBN suggestions was the 5 per cent Agenda, a campaign to increase the allocations of African asset owners to African infrastructure from its low base of approximately 1.5 per cent of their assets under management (AUM) to an impactful 5 per cent of AUM. The CBN also mobilises private sector review and engagement during PIDA project preparation. GIZ supports this process by engaging the CBN and the private sector to contribute to the mobilisation of private resources and expertise for PIDA infrastructure project development.

Results

Through GIZ-backed AU/AUDA-NEPAD interventions, more than 60 PIDA projects who formed part of the PIDA-PAP 1, that will be implemented up to 2020, have advanced in their implementation achieving the following development impact to date: 16,066 kilometres of road have been constructed, 4,077 kilometres of railway infrastructure have been built and 3,506 kilometres of energy transmission lines have been constructed. 17 countries are digitally connected to the internet via optic fibre cables. An estimated 142,000 direct jobs and 70,000 indirect jobs have been potentially created annually because of PIDA projects under operation and construction.

PIDA Job Creation Toolkit

An innovative PIDA Job Creation Toolkit has been developed and introduced to various users (e.g. PIDA project owners). The Toolkit allows project owners, public officials, infrastructure developers and policy makers to estimate the number of direct, indirect and induced jobs during the project preparation, construction and operations and maintenance O&M phase. The Toolkit also estimates the additional jobs that can be created in the economy due to the improved infrastructure service. It also provides guidance on how to maximise jobs, for example by skills development, Small and medium enterprise (SME) qualification and local content regulations. It can disaggregate the estimated jobs by economic sector, project phase, beneficiary countries and provide action areas and a scenario analysis of how local jobs can be maximised.