Gulf said to fund $30bn of African infrastructure projects
By Andy Sambidge <mailto:staff.writer_at_itp.com>
* Monday, 29 September 2014 2:08 PM
Gulf entities have funded at least $30 billion of African infrastructure
projects over the past decade, according to a new study by the Dubai Chamber
of Commerce and Industry.
The report said the funding amounts to between seven and 10 percent of total
inflows, of which approximately $15 billion was in the form of loans and
grants from Gulf development agencies and $15 billion in direct investments.
The study, developed in collaboration with the Economist Intelligence Unit,
also said that annual contributions are likely to average $5 billion in the
coming years.
It also revealed that Gulf funding for African infrastructure has focused on
North Africa, which has received the bulk of aid (about 65 percent of the
total) and also a large share of the direct private investment (60 percent).
It highlighted a focus on countries such as Djibouti and Senegal, with
relatively little Gulf investment in the continent's fast-growing economies
of Angola, Ethiopia and Nigeria, which have attracted considerable
infrastructure funding from Brazilian and Chinese entities.
According to the study, more than half of Gulf aid has gone to transport
projects, mainly road building, with about 30 percent on power and 15
percent on water projects, but very little on telecoms infrastructure.
By contrast, the telecoms sector has been the main infrastructure focus of
the GCC private sector, followed by ports and, increasingly, power
generation, it added.
Hamad Buamim, president and CEO, Dubai Chamber, said due to cultural and
historical ties to Africa, GCC investors are well positioned to invest in
infrastructure in Africa.
He said: "Opportunities are not limited to public and large companies, small
companies are also well positioned to invest. Dubai Chamber's study has
revealed that given the perceived risks associated with mega-projects in
several African markets, smaller-scale projects have becoming increasingly
more appealing, especially in the energy industry."