It is no news that across the African continent infrastructure investment and thus development has lagged behind. According to estimates by Jean Claude Gandur, founder of Addax Energy, Africa has been investing 4 per cent of its GDP in infrastructure, compared to China’s 14 per cent. Nevertheless, a recent report by the World Economic Forum, prepared in collaboration with The Boston Consulting Group, on “Managing Transnational Infrastructure Programmes in Africa – Challenges and Best Practices” actually helps to make a strong case for ‘regional energy unions’ in Africa, thereby spurring concomitant regional integration. The World Economic Forum refers to transnational infrastructure as “a physical backbone of this regional integration,” which will “open up regional markets, link production clusters in different countries, facilitate the free movement of goods, services and people, and foster political stability and peace.”
All in all this can only boost Africa’s rise as a whole within the global economy and help many African countries – understanding that Africa is not monolithic – to live up to their economic potential.
In the report the World Economic Forum lays out two broad factors, which determine the need or demand for strategic transnational infrastructure assets, and then develops four helpful indicators to measure this need. The broad determining factors are the spatial distribution of economic activity and natural resources as well as the geographical layout and political boundaries. As for the four indicators the report adds the caveat that “none of them is sufficient on its own to explain the existence of or determine the need for transnational infrastructure; and, the indicators are interdependent and often directly related”:
- Number of landlocked countries in a region: the higher the number, the greater the need for transnational infrastructure to be linked to regional and global energy markets.
- Proportion of land border versus the border’s total length
- Number of border countries: the greater the number, the more opportunities a country has for connecting with other countries.
- Average size of countries in a region: a smaller size would usually increase the desirability of cross-border transport, communications, water and energy networks for the sake of greater efficiency. Moreover, a smaller country would be less likely to contain more than one major economic centre, and hence more likely to need access to cross-border markets.
Key Indicators for the Necessity of Strategic Transnational Infrastructure
The above regional overview illustrates that Africa takes the top position in number of landlocked countries and in land border’s share of total border’s length. It comes in second in the average number of neighboring countries, with 4.5, and ranks third in average country size. In sum, all the indicators seem to point to a stronger need to build infrastructure projects than in other regions of the world. Another graphic lists the types of transnational infrastructure programs.
Types of Transnational Infrastructure Programs
This graphic also mentions various cross-border energy projects. However, transnational energy infrastructure development is seen as a physical backbone of a much bigger opportunity in the African energy space that could be literally trend-setting – a ‘regional power pool’. The vast continent of Africa has a lot to offer in terms of energy riches and power generation sources. What works best in individual African countries needs to be pooled regionally via cross-national energy transmission lines.
This energy pool could include contributions from South Africa with its vast supply of coal in addition to its formidable solar PV potential, hydroelectric power from Zimbabwe or Mozambique, and oil (Tanzania, Kenya, and Uganda) and natural gas (Mozambique, Tanzania) production from East Africa. In this respect, a massive regional infrastructure project, Lamu Port and New Transport Corridor Development to Southern Sudan and Ethiopia (LAPSSET), constitutes a noteworthy beginning.
This project illustrates Kenya’s aspiration to become “East Africa’s hydrocarbon transit hub”. It marks the first step towards a perhaps grander plan down the road that will initially link landlocked South Sudan and Ethiopia to the Indian Ocean port and create the infrastructure necessary to bring East African hydrocarbons to regional and global markets. The LAPSSET corridor, in turn, will convert Kenya into a gateway for business in East Africa and the Great Lakes Region – i.e. 11 countries covering an area about the size of Europe.