webmaster
© Copyright DEHAI-Eritrea OnLine, 1993-2011
All rights reserved
From: Biniam Tekle (biniamt@dehai.org)
Date: Tue Jul 26 2011 - 08:13:44 EDT
http://www.dw-world.de/dw/article/0,,15264436,00.html?maca=en-rss-en-all-1573-rdf
Africa | 26.07.2011 Poor infrastructure is key obstacle to development in
Africa
Africa's poor infrastructure is slowing its economic development, says a
recent UN report. Foreign investment, however, is helping fill in some of
the gaps.
African countries need to promote industrial development to spur economic
progress and reduce poverty, according to a recent report by the United
Nations Conference on Trade and Development (UNCTAD).
Africa's share of global manufacturing is drastically disproportionate to
its population. While 15 percent of the world's population lives in Africa,
only about one percent of global manufacturing takes place there.
That is largely due to poor transport, communications and energy
infrastructures, says UNCTAD's latest Economic Development in Africa Report.
*
The main infrastructure problems
*
The poor state of Africa's infrastructure becomes obvious when traveling
1,800 kilometers (1,118 miles) by train from Dar-es-Salaam in Tanzania to
Kapiri Mposhi in Zambia. Disused wagons are a common sight and the train
makes several unexplained stops.
Tanzania-Zambia Railways (Tazara), one of the region's biggest
post-independence infrastructure projects, is still plagued by derailments
and breakdowns after almost four decades in operation.
Less than two percent of the rail line's cargo capacity is being used,
according to a Tazara regional director who spoke to the Zambian daily
Lusaka Times. Heavy goods have to be transported by other, more expensive
means.
Still, transport infrastructure is not even the region's biggest problem,
keeping the lights on is.
"The majority of countries in sub-Saharan Africa still experience regular
power-outages, which of course contribute to a low productivity of many
firms," said German Development Cooperation economist Matthias Grossmann.
Power is Africa's biggest infrastructure weak point, with as many as 30
countries facing regular power outages, according to a 2010 report by the
World Bank and France's development agency.
Companies operating in most African countries where power supply is
unreliable have resorted to purchasing diesel-operated power generators,
which increases operating costs drastically, said Jens Schleuniger, Africa
Portfolio Manager at VCH Asset Management in Frankfurt.
Experts estimate electricity produced by diesel can cost twice as much as
energy from coal or hydropower-based power systems.
High energy costs combined with other infrastructure deficits, such as rail
and road problems, have lowered productivity rates at African companies by
as much as 40 percent, according to UN estimates.
"It is an entry barrier for others because you know that you face these huge
infrastructure barriers," Schleuniger told Deutsche Welle.
Last year, foreign direct investment to Africa fell by nine percent from
2009 to $55 billion, according to UNCTAD.
*
Foreigners to the rescue
*
Despite the rather disappointing figures, there are some positive signs,
such as the first toll road in sub-Saharan Africa which opened earlier this
year, funded by the African Development Bank and Standard Bank.
**
"For me it was a very important sign that projects like this can be
realized," Schleuniger said.
South Sudan's first power plant, which was funded by the United States Aid
for International Development (USAID) was inaugurated in February.
Meanwhile, the German Development Cooperation has focused on renewable
energy projects.
It has helped install solar energy systems at 70 remote public health
centers in Ethiopia and supported the distribution of renewable energy
technologies in Uganda.
However, China is the biggest financer of infrastructure projects in Africa,
according to the World Bank.
"China is adding infrastructure capacity to link resources in countries as
diverse as Mauretania, Sudan, Nigeria, DRC (Democratic Republic of the
Congo), Gabon, Angola and Zambia," George Fang, China head of mining and
metals at Standard Bank, told FinanceAsia magazine.
Earlier this year, the Chinese government gave a soft loan to the
Tanzania-Zambia Railways Authority for locomotives and wagons. As of 2010,
it was investing in energy projects in Zambia, Ethiopia, Nigeria, and five
other countries, according to Standard Bank.
Author: Chiponda Chimbelu
Editor: Greg Wiser
----[This List to be used for Eritrea Related News Only]----