Summary
Africa Strategic
Infrastructure Breakfast
Davos-Klosters, Switzerland 23 January
Key Points
Synopsis
– Africa remains a compelling investment prospect with
exciting progress and strong political will for collaboration
with the private sector on infrastructure development in
Africa
Africa remains a convincing investment prospect in 2015, with
African GDP expected to grow well above the global average
in 2015. However, to achieve this growth, infrastructure
constraints in particular need to be addressed. Power and
transport infrastructure remain key to development.
– Embedding the lessons learned from accelerating the pilot
Central Corridor programme is a key for replicating and
addressing the infrastructure deficit
– A paradigm shift of institutional money is occurring; the
source of funds requires adaptive but predictable
frameworks and trusted partnerships
– Coordinating structured scale across the region will
mobilize funds towards project preparation,
implementation and operation
– Optimizing existing African markets, capturing value and
developing local skills are important for regional
development
Following the World Economic Forum on Africa (Abuja, May
2014), the Forum convened an executive breakfast in Davos
with heads of state and leaders from top multilateral
organizations and business to discuss the progress of the
second phase of the initiative and to deliberate on the next
steps.
From talk to action
Recognized and supported by President Jacob Zuma, the
substantial progress achieved in the Central Corridor pilot
programme under the Programme for Infrastructure
Development in Africa (PIDA) reflects the willingness and
desire of African governments and private companies to share
their expertise and collaborate on a common goal of
accelerating infrastructure development in Africa.
01: Brian Molefe,
Group Chief Executive,
Transnet, South Africa;
Claver Gatete, Minister
of Finance and
Economic Planning of
Rwanda; Philipp
Gerbert, Senior Partner
and Managing Director,
The Boston Consulting
Group, Germany;
Geoffrey Trevor White,
Chief Executive Officer,
Africa, Agility, United
Arab Emirates; Luis
Castilla, Chief
Executive Officer,
Acciona Infrastructure,
Acciona, Spain; and
Suresh Chaturvedi,
Group Chairman,
Overseas Infrastructure
Alliance (OIAPL), India
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The Business Working Group comprising more than 45 local
and international companies – given the political support
needed – has proven that multistakeholder collaboration can
drive development. Strong partnership and dedication have
provided the momentum to shift from “talking about it to
doing it.” In just eight months, this $18 billion mega-transport
programme across five countries has gone from an idea to a
structured state, with support mobilized for a technical review
of 18 cornerstone projects along the corridor.
The Central Corridor as a pilot for acceleration holds
exceptional growth potential for the region, and will elevate
interregional and intercontinental trade. Connecting regions
via enhanced coastal and inland ports such as Lake
Tanganyika and Kigoma; upgrading rail and roads to
Lubumbashi with one-stop border posts – all contribute to
reduced bottlenecks and the improved movement of goods,
people and services. Over and above the physical
infrastructure, focus remains on developing a true “value
corridor” rather than an “extraction corridor” by opening
cotton, fishery and manufacturing industries in the region to
provide additional investor opportunities and more equitable
distribution of opportunities to local communities.
The Development Bank of South Africa as co-chair of the
initiative and The Boston Consulting Group as project
advisers were recognized for their generous and tireless
support to achieve the ambitious deliverables and timelines.
To continue the close collaboration in the acceleration
process and leverage private-sector expertise, an additional
appetite review of the 18 shortlisted projects of the Corridor
will be held in March in Johannesburg prior to the Central
Corridor Investors and Industry Forum. Business Working
Group members Standard Bank, Transnet, The Boston
Consulting Group and Old Mutual as well as the Development
Bank of South Africa will discuss the outcomes of the
technical consultant’s review of the shortlisted projects and
provide further recommendations to entice investors.
The Central Corridor Investors and Industry Forum will take
place in March in Dar es Salaam.
Replicated success
Replicating the process of acceleration from the Central
Corridor and the continued engagement with private sector
will be valuable for other infrastructure programmes in the
region. Other important “pieces of the puzzle” include the
North-South Corridor, the Beira Nacala Corridor and the
Zimbabwe Railway, which ensure integrated connections from
North to South and East to West. The scope of an additional
pilot will be discussed, with a formal report to be completed
and shared prior to the World Economic Forum on Africa in
June 2015 in Cape Town. The report will focus on bottlenecks
and suggest a way forward, given the lessons learned from
the Central Corridor pilot.
Properly prepared and precisely implemented projects
Quality preparation, implementation and construction
management are required along the project cycle to capture
the value proposition for Africa. Vehicles such as the Africa50
project preparation facility of the African Development Bank
contribute to a well-prepared pipeline of projects available to
the market. Infrastructure project preparation facilities (IPPF)
should leverage newly available, innovative credit facilities. For
example, USAID announced the launch of a credit
enhancement facility based on the success of Power Africa.
The facility includes partners USAID, the Government of
Sweden, SNBC and Citi group. Additional knowledge
contributions and models for improved ways to work, such as
the concept IPPF being developed by the World Economic
Forum in collaboration with The Boston Consulting Group, are
valued contributions in this space. The report is expected to
be launched in March 2015.
Coordinated and connected scale
Better coordination and connectivity between projects will
provide the size and scale required by investors for enhanced
value. The importance of developing industries with enabling
frameworks and regulatory environments cannot be
underestimated. Examples including agreements that allow
gas from Mozambique and Tanzania to be used for the
cement, fertilizer and other manufacturing sectors in the
region should take priority for policy-makers, as they provide
additional value capture and cost efficiencies.
Internal value capture and continued enablement
Strong coordination and enhanced internal value capture for
the continent requires local currency and debt capital markets
enhancement. The South Africa Pan African Development
Fund has been very successful with its first issue in South
African rand in London. However, leveraging and deepening
of markets require pension fund, insurance, energy and other
regulatory and sector amendments. Marginal changes could
release significant sums of money for infrastructure.
Local skills and capacity-building can be enhanced with
strategic and decisive supplier-development terms. Transnet
is seen as a leader in this area, using partnerships with GE
and other international companies to develop the local
engineering and technical skills required to become a leading
manufacturer of rail components.
The proposal of a knowledge platform was well received after
potential “PPP hub” suggestions were raised. Participants
discussed the idea of a collaborative platform for data and
information-sharing between the OECD, IMF, World Bank and
the World Economic Forum to close the gap between
infrastructure projects that need to happen and how they can
be funded. Progress on establishing this platform will be
provided in a G20 report in Turkey later in the year, and the
global search for a CEO is ongoing.
In the lead-up to World Economic Forum on Africa in Cape
Town (3-5 June 2015), proposed activities include:
– DBSA-AfDB-AUC-NEPAD-Forum technical result review
and preparation workshop for the Central Corridor
(Johannesburg, March 2015)
– BWG Appetite Testing Roundtable – Identify strategic
investors for promotion of shortlisted projects of the
Central Corridor (Johannesburg, March 2015)
01: Njuguna S.
Ndungu, Governor of
the Central Bank of
Kenya; Nhlanhla Musa
Nene, Minister of
Finance of South
Africa; Jeff Radebe,
Minister in the
Presidency of South
Africa; Patrick
Khulekani Dlamini,
Chief Executive Officer
and Managing Director,
Development Bank of
Southern Africa; Jacob
G. Zuma, President of
South Africa; Brian
Molefe, Group Chief
Executive, Transnet,
South Africa; Claver
Gatete, Minister of
Finance and Economic
Planning of Rwanda;
Philipp Gerbert, Senior
Partner and Managing
Director, The Boston
Consulting Group,
Germany; and Geoffrey
Trevor White, Chief
Executive Officer,
Africa, Agility, United
Arab Emirates
– Scoping of second potential programme for acceleration
to commence in March 2015; progress report to
presidency prior to June 2015 World Economic Forum on
Africa
– Central Corridor Industry and Investor Forum (Dar es
Salaam, March 2015)
– Early Stage Project Finance model IPPF concept Launch
(March/April 2015)
– World Economic Forum Toolkit – Documenting best
practices for accelerating and managing large
infrastructure programmes in Africa as part of the pilot
(World Economic Forum on Africa, 3-5 June 2015); the
toolkit will include selection methodology, acceleration
process, transnational infrastructure programme
management and early-stage project finance
– Transition planning and enablement of NEPAD Agency for
replication of acceleration of PIDA (ongoing, June 2015)
A complete overview of the initiative to date can be found
online: http://www3.weforum.org/docs/WEF_African_
Strategic_Infrastructure_Initiative_Summary_Synopsis_
report_2015_1401.pdf
Disclosures
This summary was written by Benji Coetzee. The views
expressed are those of certain participants in the discussion
and do not necessarily reflect the views of all participants or of
the World Economic Forum.
Copyright 2015 World Economic Forum
This material may be copied, photocopied, duplicated and
shared, provided that it is clearly attributed to the World
Economic Forum. This material may not be used for
commercial purposes.
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Co-Chaired by
Gordon Brown, Chair, World Economic Forum Global
Strategic Infrastructure Initiative; Member of Parliament; Prime
Minister of the United Kingdom (2007-2010)
Patrick Khulekani Dlamini, Chief Executive Officer and
Managing Director, Development Bank of Southern Africa,
South Africa
Remarks by
Elsie S. Kanza, Senior Director, Head of Africa, World
Economic Forum; Young Global Leader
Brian Molefe, Group Chief Executive, Transnet, South Africa
Alex Wong, Senior Director, Head, Center for Global Industries
(Geneva) and Head, Basics & Infrastructure Industries
Special Guest
Jacob G. Zuma, President of South Africa
With
Mohamed Diaré, Minister of Economy and Finance of Guinea
Claver Gatete, Minister of Finance and Economic Planning of
Rwanda
Modest Jonathan Mero, Ambassador and Permanent
Representative of Tanzania to the United Nations, Geneva
Benno Ndulu, Governor of the Bank of Tanzania
Njuguna S. Ndungu, Governor of the Central Bank of Kenya
Nhlanhla Musa Nene, Minister of Finance of South Africa
Ebrahim Patel, Minister of Economic Development of South
Africa
Jeff Radebe, Minister in the Presidency of South Africa
Participants
Bertrand Badre, Managing Director and World Bank Group
Chief Financial Officer, The World Bank, Washington DC
01: From left:
Benji Coetzee, Project
Manager, Africa
Infrastructure, World
Economic Forum;
Hisham H. Mahmoud,
President,
Infrastructure,
SNC-Lavalin Group,
USA; John M. Beck,
Executive Chairman,
Aecon Group, Canada;
Simpiwe K. Tshabalala,
Joint Chief Executive
Officer, Standard Bank
Group, South Africa;
Ralph Mupita, Chief
Executive, South Africa
and Emerging Markets,
Old Mutual, South
Africa ; Gordon Brown,
Chair, World Economic
Forum Global Strategic
Infrastructure Initiative;
Member of Parliament;
Prime Minister of the
United Kingdom
(2007-2010); Modest
Jonathan Mero,
Ambassador and
Permanent
Representative of
Tanzania to the United
Nations, Geneva; Elsie
S. Kanza, Senior
Director, Head of
Africa, World Economic
Forum; Young Global
Leader; Rajiv Shah,
Administrator, US
Agency for
International
Development (USAID),
Nku Nyembezi-Heita,
Chairman Designate,
Johannesburg Stock
Exchange, South
Africa; Mark Cutifani,
Chief Executive Officer,
Anglo American,
United Kingdom;
Bertrand Badre,
Managing Director and
World Bank Group
Chief Financial Officer,
World Bank,
Washington DC
John M. Beck, Executive Chairman, Aecon Group, Canada
Luis Castilla, Chief Executive Officer, Acciona Infrastructure,
Acciona, Spain
Suresh Chaturvedi, Group Chairman, Overseas Infrastructure
Alliance (OIAPL), India
Mark Cutifani, Chief Executive Officer, Anglo American, United
Kingdom
Karin Finkelston, Vice-President, Global Partnerships,
International Finance Corporation (IFC), Washington DC
Mandla Gantsho, Non-Executive Director, Sasol, South Africa
Philipp Gerbert, Senior Partner and Managing Director, The
Boston Consulting Group, Germany
Ahmed Heikal, Chairman and Chief Executive Officer, Qalaa
Holdings, Egypt
Gregory Hodkinson, Chairman, Arup Group, United Kingdom
Talal Khalid Idriss, Chief Executive Officer, Bahra Advanced
Cable Manufacture, Saudi Arabia
Jabu A. Mabuza, Chairman, Telkom Group, South Africa
Hisham H. Mahmoud, President, Infrastructure, SNC-Lavalin
Group, USA
Thomas Maier, Managing Director, Infrastructure, European
Bank for Reconstruction and Development (EBRD), London
Kgosi Leruo T. Molotlegi, Executive Chairman, Royal Bafokeng
Administration, South Africa
Ralph Mupita, Chief Executive, South Africa and Emerging
Markets, Old Mutual, South Africa
Nku Nyembezi-Heita, Chairman Designate, Johannesburg
Stock Exchange, South Africa
Geoffrey Qhena, Chief Executive Officer, Industrial
Development Corporation of South Africa (IDC), South Africa
Rajiv Shah, Administrator, US Agency for International
Development (USAID)
V. Shankar, Group Executive Director and Chief Executive
Officer, Europe, Middle East, Africa and the Americas,
Standard Chartered, United Arab Emirates
Lutfey Siddiqi, Global Head, Emerging Markets - FX, Rates
and Credit, UBS, Singapore; Young Global Leader
Jubril Adewale Tinubu, Group Chief Executive, Oando, Nigeria
Hendrik du Toit, Chief Executive Officer, Investec Asset
Management, United Kingdom
Geoffrey Trevor White, Chief Executive Officer, Africa, Agility,
United Arab Emirates
Simpiwe K. Tshabalala, Joint Chief Executive Officer,
Standard Bank Group, South Africa
Kapil Wadhawan, Chairman, Rajesh Wadhawan Group, India
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