Thursday, August 2, 2007

Infrastructure investment opportunities in Africa

Many in development ask themselves, "how can Africa grow", or "how do we alleviate poverty in Africa"? The quick answer to all that is investment in some form of loans, aid and so on, and so forth. However, let's remember that great civilizations such as; Roman Empire, Greeks, Egyptians, and Incas grew by infrastructure. Infrastructure is key in linking people, places, things, and most important commerce. Commerce is the lifeblood in any civilization, this lifeblood enables farmers to grow crops and be able to transport their produce thousands of miles. Kenya is a good example of this, farmers are transporting flowers to be sold in the European market.

What Africa needs right now is multi-billion dollar investment in the following infrastructure: railways, and roads. I didn't mention telecom, because to have fiber optics you need roads to build the fiber network. This fiber is what is needed if Africa is going to take that leap in Information Technology Enabled Services (think Outsourcing/BPO - ITES).

People reading this post will ask, "how can Africa afford all this". I wrote two months ago about how the Chinese use a process called full-cost recovery to recoup the cost of any public works project. When a highway is built, the Chinese levy tolls to recoup the costs of the road. Tolls pay for the cost of the roads faster, then raising public taxes to build and maintain the road. Read this post I wrote in June.

China's infrastructure investment could have a very positive spin-off in lowering transaction costs and assisting African governments to address social calamities such as poor health services, energy crisis, and skills development among others.

No comments:

Post a Comment

You are welcomed to leave a message!

Post a Comment

Related Posts Plugin for WordPress, Blogger...