EAC in renewed rail, road, energy push

8 July 2013

newvision.co.ug

"Implementation, implementation, implementation," were the closing words from Diarietou Gaye, the World Bank country director for Eritrea, Kenya and Rwanda at last week´s key regional infrastructure meeting in Kampala. 

Gaye's summation captured the underlying tone and call to action by eminent speakers at the crucial meeting themed "Trans East African Networks Match-Making Conference-Financing Infrastructure for the future generation in the EAC region".

The conference was held at the reclusive Lake Victoria Serena Resort in Lweza found on the dusty unpaved road off the Entebbe highway, somewhat symbolic of the state of infrastructure in the region. It is the first major regional engagement on infrastructure since the 2nd retreat of the EAC presidents in Nairobi last November. 

Available statistics show how Uganda and East Africa badly need a functional railway line, road network and a more developed water transport system to handle the increasing trade volumes. Observers agree that if this infrastructure were developed, it would trigger more intra-regional trade and increase the region's competitiveness as investors would turn here enmasse to set up industry. 

Currently, Africa consumes only 3% of total global electricity, and yet in terms of size, it is as big as the US, Europe, China, and Alaska combined. Of the 3%, more than 50% is consumed in southern Africa, mainly in South Africa, thus more consumption of energy would mean more industry, employment and taxes. This would in turn increase the region's share in international trade. Ultimately there would be more earnings and livelihoods would improve. 

With last week's meeting, analysts now contend that there has never been any period in recent history when the EAC region seems more fired up to turn the page from a gloomy dependent region to one of real action. What has been missing as pointed out by Gaye is action, although it is also agreed that the task requires enormous resources. 

It is estimated that close to $930b is needed annually for investment in infrastructure in the next 10 years in Africa, according to a World Bank study. 

Gaye feels the commitment from the leaders is there but it is the mixed reality of dealing with different parties that sometimes bogs down good intentions."It is a complex thing. It is already complex when you are doing it in one country, it is more when more countries are involved. We need to simplify procedures," urged Gaye. 

The World Bank is proposing a system where the multi-lateral lender provides a guarantee for investable funds then the private sector comes in to fund projects in a risk mitigated environment. 

The Kampala meeting was expected to tie some loose ends to actual funding and also provide good mechanism for follow ups. For long, infrastructure development financing in East Africa has been dominated by donor and government financing for the last decades, with low participation of the private sector, including commercial banks. 

But EAC secretary general Ambassador Richard Se zibera said that the region's presidents had agreed that time had come where the involvement of the private sector in the financing of infrastructure development was made key to the sustainable roll out of efficient infrastructure in the region. 

Citing the recent pronouncement from the UN Secretary General's energy-for-all initiative, the US's Power Africa initiative, commitments by China, Japan and the BRICS to infrastructure, coupled with a newly emerging and assertive African private sector, Sezibera is optimistic.

"We have an unprecedented opportunity to move to tangible progress year after year," said Sezibera. 

Because of the promise of good returns, which is one of the highest in the world at about 20%, the Africa Development Bank now sees a chance for action, away from rhetoric. 

Original article written by David Mugabe for New Vision