Infrastructure Deficit Meets Infrastructure Financing Gap : Derisking African Infrastructure Projects Towards Attracting Private Investment

While there could be debate as to the root causes of Africa’s dearth of infrastructure, it is uncontested that this infrastructure deficit widens each year – and the remedy to same, lies beyond the fiscal capacity of national governments and public entities. The foregoing necessitates private investment for African infrastructure development. However, compared to regions such as Asia, North America, Europe and the Middle East, Africa continues to attract the lowest amount of global foreign investment annually, and the primary reasons for this, form the subject of this paper. While some argue that Africa merely suffers unduly from a negative perception of risk, this paper, while not disparaging the foregoing assertion, argues that global investors have sufficient evidence upon which to base a claim that African infrastructure projects are disproportionately exposed to certain risks, which are less prevalent in more developed regions. It further examines these risks and proposes both short and long-term approaches towards addressing same, with a view to combating the risk perception that currently restrains private capital from providing much-needed investment for African infrastructure development