Policy reform, innovative financing, technological integration and capacity building are the four key pillars in overcoming barriers to infrastructure project development in Africa.

This is according to the 'Accelerating Infrastructure Development in Africa: Strategies to Reduce Lead Times' research paper published by State-owned asset management firm the Public Investment Corporation (PIC).

The research shows that 80% of infrastructure development projects stall before moving past the feasibility or planning phases. Regulatory hurdles, financing constraints, institutional weaknesses, corruption and a lack of professional skills stymie development and discourage investment.

The PIC believed this was not owing to a lack of ambitions or good infrastructure ideas, but was largely owing of systemic delays driven by regulatory fragmentation, weak institutional capacity and misaligned policy and financing structures, PIC CIO Kabelo Rikhotso said during a panel discussion on the research paper on July 28.

Africa faces significant infrastructure investment shortfalls, estimated at between $130-billion to $170-billion a year, for power, transport, water and digital systems, which leads to underpowered energy grids, fragmented transport and limited digital connectivity.

The lack of infrastructure investment also suppressed productivity, hindered regional integration, and imposed significant economic and social costs, particularly on rural and low-income communities, he noted.

Public resources alone were insufficient to close this gap, and other sources of financing were required. Meaningful infrastructure development would not be achieved only from the funding of public sources or a few large pension funds, said pension fund Eskom Pension and Provident Fund (EPPF) CIO Sonia Saunderson.

As the PIC paper shows, the capital gap is enormous and many high-impact but smaller-scale projects, particularly in underserved areas, do not garner proportional attention from potential investors.

“Therefore, it is important for us to take deliberate, targeted steps to innovate beyond only deploying capital, but also help to build the infrastructure investment market,” she said.

For example, research the EPPF is undertaking with local stock exchange the JSE is looking at developing listed infrastructure vehicles, such as infrastructure investment funds or listed project-specific investment funds.

“This can help to democratise access to infrastructure investment opportunities for smaller pension funds and retail investors. This can help to create a vehicle to mobilise assets from owners in South Africa and, as a listed vehicle, it will build transparency,” she said.

Further, governments or development agencies failure to deliver infrastructure projects on time and within budget contributes to delays and the stalling of projects.

Many projects are slowed by complex approval processes, unclear land rights and weak inter-agency coordination. Simplifying regulations, digitising land registries, and introducing standardised contracts can reduce uncertainty and speed up delivery, the report stated.

Therefore, governments should establish dedicated infrastructure acceleration units to coordinate agencies and fast-track approvals. Embedding key projects into legal frameworks and budgets can help ensure continuity across political cycles, the report advised.

Meanwhile, the successful delivery of infrastructure relies on capable institutions and skilled professionals. Too many projects stall because government agencies lack the expertise and resources to plan, prepare and manage complex initiatives.

Strengthening institutions and developing local talent are critical for sustained progress, the report recommended.

Further, digital solutions, such as building information modelling, drones and advanced data analytics, can improve project design, monitoring and delivery.

However, adoption of such technologies remains uneven, and the gap in digital infrastructure, especially in cloud computing and data centres, risks widening Africa’s technological divide, the report highlighted.

Additionally, to accelerate infrastructure development in Africa, development finance institutions (DFIs) should significantly expand funding for project preparation facilities to create a stronger pipeline of bankable projects, the report said.

“Providing technical support to governments in contract negotiation, public-private partnership management and regulatory reform is essential,” the report said.

Further, DFIs also have a key role in promoting regional standards, facilitating cross-border projects, and developing financial instruments to manage risks, such as currency volatility and sub-sovereign credit challenges, it added.

Accelerating infrastructure development in Africa is essential for achieving inclusive growth, social equity and long-term resilience.

Further, evidence from across the continent shows that meaningful progress is possible through coordinated action built on sound policies, innovative financing, institutional capacity and technology.

By working together on these fronts, Africa could reduce project lead times, attract greater investment and build the infrastructure needed for a more prosperous and connected future, said Rikhotso.