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Urgent US$621 Billion Need for Africa to Meet UN Sustainable Development Goals for Drinking Water, Sanitation and Electricity

2018-07-03 07:01

SYDNEY, July 3, 2018 /PRNewswire/ --

Two new reports reveal urgent need for infrastructure investment and reform  

The Global Infrastructure Hub, a G20 initiative, has today published two reports that reveal an urgent need for infrastructure investment in 10 Compact with Africa[1] countries, and highlight the reforms required to encourage greater investment.  

The first of these reports, Global Infrastructure Outlook: Infrastructure Investment Need in the Compact with Africa Countries, reveals that, unless US$621 billion is invested in these 10 countries by 2030, they will fail to meet the UN Sustainable Development Goals (SDGs) for universal access to drinking water, sanitation and electricity.

This amount is three times what is expected to be delivered based on current investment trends (US$206 billion), exposing an investment gap of US$415 billion.

Moreover, the required US$621 billion is part of a greater total infrastructure investment need of US$2.4 trillion for energy, telecommunications, airports, ports, rail, roads and water to 2040, if these 10 countries are to meet the demands of accelerating economic and population growth. Based on current trends, forecast investment is US$1.4 trillion, leaving a US$1 trillion investment shortfall.

In delivering these findings, Outlook forecasts for the first time the scale of the overall infrastructure investment gaps at both country and sector level in 10 Compact with Africa countries, and how these relate to meeting the SDGs.

Ludger Schuknecht, German G20 Finance Deputy and Co-Chair of the G20 Africa Advisory Group said: "We welcome the Global Infrastructure Hub's activities towards analysing investment conditions in Compact with Africa countries. This will help Compact Countries, together with partners, in developing sound policy frameworks for sustainable private investment."

Currently, 40 per cent of people living in 10 Compact with Africa countries don't have ready access to electricity[2], and 59 and 53 per cent live without readily available drinking water and sanitation respectively[3]. The Global Infrastructure Hub CEO Chris Heathcote said that time is running out if the world is to meet the UN SDGs in these Compact with Africa countries.

"Recently, UN General Assembly President Miroslav Lajčák called for a sense of urgency in financing the UN SDGs. Today's Outlook report reveals the magnitude of that need at a country and sector level, helping public and private investors to better direct their financing," Mr Heathcote said.

"However, the huge challenge of delivering the UN SDGs is not only a matter of finance, but also of policy reform-we need strong governance and well-planned projects in these 10 countries."

The second report published by the Global Infrastructure Hub today, InfraCompass: Set your Infrastructure Policies in the Right Direction in the Compact with Africa Countries, provides a holistic view of the policy drivers that deliver more and better infrastructure. According to the report, to maximise the investment opportunities for the 10 countries, work needs to be done to improve governance and regulatory and institutional frameworks.

InfraCompass finds that Morocco and Rwanda are notable performers, marked by their improvements to their regulatory quality, rule of law, and investment and competition frameworks.

"Private investors are a key component to bridging the infrastructure investment gaps and, although institutional investors are willing to participate, they are also wary of the risks," Mr Heathcote explained.

"Working with these countries to undertake reform and capacity building will pay dividends in encouraging higher levels of sustainable economic growth."

Head of Infrastructure Policy and Project Preparation at the European Bank for Reconstruction and Development (EBRD) Matthew Jordan-Tank said, "The Outlook and InfraCompass reports resonate with our experience in Africa.

"The findings point to clear and important guidance for public and private sector stakeholders alike. In order to plan, prioritise, tender, finance and monitor infrastructure of high quality, there needs to be a focus on improved regulatory approaches and the strengthening of national institutions. EBRD looks forward to collaborating with the Global Infrastructure Hub on these efforts."  

The two reports were researched and developed over a six-month period in partnership with Oxford Economics (Outlook) and KPMG (InfraCompass). Both are available in an interactive format on our open access platform at https://www.gihub.org.

Notes to editors 

The full Global Infrastructure Outlook: Forecasting infrastructure investment needs and gaps report and online tool can be found at: https://outlook.gihub.org

The full InfraCompass: Set your infrastructure policies in the right direction report and online tool can be found at: https://infracompass.gihub.org

About Global Infrastructure Outlook  

In 2017, the Global Infrastructure Hub, in partnership with Oxford Economics, launched Global Infrastructure Outlook to explore how much the world needs to invest in infrastructure at a country and sector level up to 2040. It helps address a lack of detailed information relating to global infrastructure investment.

The most recent update to Global Infrastructure Outlook expands upon the 2017 study and focusses on 10 Compact with Africa countries. The report outlines total infrastructure investment needs, current investment trends and the specific investment required to meet water, sanitation and electricity UN Sustainable Development Goals.

About InfraCompass  

InfraCompass, in partnership with KPMG, is a tool developed to help countries deliver infrastructure more effectively and to provide a robust understanding of a country's infrastructure market. InfraCompass has been updated to cover 56 countries, including 10 Compact with Africa countries.

InfraCompass is a comprehensive, easy-to-use online database that reveals country infrastructure performances in the categories of:

  • Institutions and governance
  • Regulatory and competition frameworks
  • Permits, licenses, and land acquisitions
  • Plan and select
  • Procurement
  • Delivery and operations

About the Global Infrastructure Hub 

Launched in 2014 by the G20, the Global Infrastructure Hub is an organisation dedicated solely to infrastructure in both developed and emerging markets. The global challenge remains acute given population growth, increasing urbanisation, and a need to replace ageing infrastructure. We are helping governments unlock trillions of dollars in private investment to fund much-needed public infrastructure, creating productive economies and more liveable cities.  We work with both public and private sectors to facilitate knowledge-sharing, highlight reform opportunities, support the adoption of leading practices and help to build the global pipeline of quality, bankable infrastructure projects. We are independent and provide all our tools and services on an open and free to access platform. For more information, visit: http://gihub.org

About the Compact with Africa  

The Compact with Africa was initiated by the German G20 presidency in the Finance Track, endorsed by the G20 finance ministers and central bank governors in Baden-Baden in March 2017, to promote private investment in Africa, including in infrastructure. Central to the Compact with Africa is the concept of mutual commitments to measures and instruments to improve the framework conditions for private investment, including in infrastructure. The aim is to develop comprehensive, coordinated, and country specific investment compacts between individual African countries, international organisations (IOs), and other partners. Investment Compacts will specify measures and instruments to improve the macro, business and financing frameworks.

For more information, visit: https://www.compactwithafrica.org/content/compactwithafrica/home.html

-----------------------------

1. The 10 countries are: Morocco, Tunisia, Egypt, Ethiopia, Senegal, Guinea, Côte d'Ivoire, Ghana, Benin, and Rwanda

2. World Bank World Development Indicators, https://data.worldbank.org/products/wdi    

3. UNICEF and World Health Organisation, https://washdata.org/data

Source: Global Infrastructure Hub

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