Infrastructure in Africa has often been ignored, underfunded and not allowed to rapidly develop. A part of this has come from African governments and their inability to fund projects to completion, whilst a lot of funding from external sources have struggled to go to the right places. However, direct funding into specific projects is likely to have more of an impact, whilst holding benefits for everyone involved. We look at three main areas to benefit from African investment.
Africa has been showing significant potential as a continent in recent years, with significant investment coming into infrastructure projects from China, hugely increasing the continent’s potential to grow. Road-building projects, for example, have seen huge profits in the long run for the investor as toll booths that are set up on new road networks means that costs are covered quickly and profits can be made. The same gains can be made with investments in the railway network or airports. People will always need to travel, and by investing in transport systems, investors can make significant guaranteed profits for a long period of time.
The local population is also likely to see the huge benefits of investment in infrastructure programs. Whether it is roads to travel across the country, the internet to stay connected to the world, or energy supplies to power the development, the local population will see the direct benefit of these steps forward. Jobs can be created, quality of life for those who might otherwise be impoverished would improve due to access to necessities, and internet access would allow the average citizen to buy or sell things online, even further bringing economic benefits to those in investment areas. These positive impacts would spread too, meaning that even if someone isn’t directly affected they would feel the impact.
Investment in local infrastructure projects is likely to create more jobs, so workers could benefit from higher income and a better quality of life. This makes them more likely to spend more than they would if these opportunities weren’t available. Investment partners who help develop Africa’s infrastructure will have huge markets available to them, allowing them to grow more and employ more – and their employees will continue to spend. Higher investment kick-starts a cycle of economic growth, and companies that choose to stick around after their initial investment tend to see great returns.
African investment – where to find out more
Jabiut manages a wide range of diversified portfolios across several African countries. We work with investment partners to manage major capital projects to help African nations build and implement the basic infrastructure they need to allow their economies to thrive and their people live better lives.
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About The Author
Tunde is the founder of UK-based Jabiut Development Partners; a strategic development, infrastructure finance and project consulting organisation. He is actively involved in major programme delivery and strategic advisory; providing numerous organisations and arms of government with advice on capital projects, project financing and infrastructure concession placement.
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