Why private capital is key to unlocking African mobility
Opinion
By
Tidiane Doucoure
| Mar 31, 2024
According to a study by UNEP, 78 per cent of Africans commute to work on foot, and a fifth of the population spends nearly an hour walking or cycling to reach their destination due to a shortage of efficient and safe transport.
In a continent where 65 per cent of roads have no pavement, people and animals roam freely on the street, causing accidents as they intersect with buses, trucks, or cars refusing to kill their speed.
On the busy streets of Dakar, it is not uncommon to see urban dwellers spill into the streets in long lines, competing for a place on overcrowded public buses. It's not just commuters that are impacted by a lack of mobility solutions, businesses and economies are equally constrained by huge gaps in infrastructure that prevent the efficient movement of services and goods.
Ports play a critical role in the movement/trade of goods and according to the World Bank, Africa's ports rank among some of the lowest performers in the world in terms of container capacity and modernised solutions. As a result, many African businesses experience costly delays in importing and exporting goods, inhibiting their ability to expand their footprint and benefit from increased access to markets.
Despite the challenges, innovative solutions from a wide variety of actors including private companies, governments and development partners are beginning to emerge.
Indeed, if mobility is seen with a wider lens as an infrastructure solution that can deepen the connections between people, goods and places, then investing with a mobility mindset will help accelerate the pace at which Africa's infrastructure gap is finally closed.
Public-private partnerships (PPPs) have been rising across Africa to help bring large infrastructure projects to fruition, in sectors from airports to water supply.
The combination of public and private entities creates an effective risk-sharing arrangement, which incentivises both parties to invest, opening up new opportunities for investors while allowing governments to benefit from private sector expertise and financing and deliver key infrastructure for the public.
With the constraints on government expenditure in many African countries, private capital can be deployed - through direct investments in businesses or through partnerships with governments and DFIs - to solve complex mobility issues, particularly those affecting economic opportunities, the environment, health, or self-reliance.
Infrastructure enabling the processing of critical minerals for the energy transition, such as access roads and transmission lines is also a core component of investing in mobility.
We also need to invest in social mobility and open up restricted access to, from and within urban centres for youth or women; these groups lack safe ways to travel when it is late or for work.
The growth of Africa's population from approximately 1.3 billion to 2.5 billion by 2050 underscores the urgency to invest in infrastructure enabling mobility across the continent and provides multiple routes to securing commercially sound returns. That said, the large gap in mobility infrastructure across African countries means that despite investor interest, funding remains a challenge as investors are not yet meeting the scale of demand.
The region needs more private investment in mobility to deliver the development gains required as rural-urban migration increases, cities swell in size, and the speed of demographic shifts accelerates. Investing in economic mobility is a powerful way to improve social inclusion, drive climate action and boost productivity.
Tidiane Doucoure, is director, EM alternative credit at Ninety One, fund manager of the Emerging Africa Infrastructure Fund. This article was first published by African Business