Driving transport infrastructure in Africa

In Africa, the stark contrast between urban accessibility and rural isolation is a daily reality for many. Stories of young children in rural areas walking long distances to school or pregnant women relying on makeshift transport to reach healthcare facilities highlight the critical need for infrastructure reform.

Widespread transport and infrastructure issues, including inadequate roadways and ineffective port facilities, create obstacles for the transport of goods, especially during the rainy season when many routes become impassable. These bottlenecks impede the movement of goods and cause delays that reduce Africa’s competitiveness in regional and global markets.

Transport infrastructure lies at the heart of economic growth and improved quality of life which is essential for any region’s success. In Africa, underdeveloped infrastructure remains a barrier to social equity and economic diversification. Poorly maintained road networks, fragmented rail systems, and outdated port facilities inflate logistics costs, hindering African businesses and limiting the competitive reach of African goods. The economic and social benefits of improved infrastructure are particularly significant in the context of the African Continental Free Trade Agreement (AfCFTA), which seeks to bolster Africa’s position in the global economy by increasing intra-regional trade and investment.

Infrastructure as a catalyst for growth

Recognising infrastructure as the backbone of the economy, African governments are beginning to prioritise investments in transport. Countries like Tanzania, Kenya and Rwanda have identified transport as a pillar in their national development visions. Tanzania’s 'Vision 2025', for example, emphasises roads, railways and air and water systems to foster economic growth. However, even as regional investments grow, Africa still faces a substantial funding gap. According to the African Development Bank, the continent needs between $130 and $170 billion annually for infrastructure funding, with a deficit ranging from $68 to $108 billion. Transport infrastructure alone accounts for at least 15% of this total, underlining the need for targeted investment.

To meet these demands, a coordinated approach between the public and private sectors is essential. Cross-border projects require high levels of funding and regional coordination, particularly for integrated corridors that link road, rail and port facilities. Currently, several such projects are underway in Kenya, Rwanda and the Democratic Republic of Congo (DRC). However, achieving modern, cost-effective, and fully integrated transport infrastructure across Africa demands even greater capital infusion.

Driving investment through public-private partnerships

The large-scale nature of cross-border infrastructure projects calls for innovative financial solutions, particularly public-private partnerships (PPPs). By pooling resources and sharing risks, PPPs create a viable pathway for development while attracting essential private capital. Concessionary funding from Development Finance Institutions (DFIs) is also crucial, especially for low-income countries that lack the financial depth to support large infrastructure initiatives. DFIs provide concessionary funding that supports cross-border projects in sectors that benefit from extended railways, roads, and advanced logistics networks, often going beyond simple 'pit-to-port' models to foster diversified growth.

For PPPs to thrive, supportive policies and government guarantees are necessary. Flexible project frameworks and well-defined operational contracts instil confidence in private investors, clarifying operational roles and spreading financial risks across the value chain. This approach allows for customised solutions that account for Africa’s diverse markets, maximising the potential for sustained development. For instance, Nedbank Corporate and Investment Banking, with a growing footprint across East Africa, is positioned to play a significant role in financing cross-border transport initiatives. Institutions like Nedbank provide essential capital and expertise, paving the way for projects that support regional connectivity.

The role of government reforms in investment confidence

Beyond investment models, macroeconomic and financial reforms within African governments are vital for attracting private sector capital. Addressing sovereign and political risks, particularly around contract enforcement and dispute resolution, is fundamental to building investor confidence. As government policies become more conducive to foreign investment, sovereign risk in the transport sector diminishes, encouraging both local and international investors to engage.

Moving towards a connected and prosperous Africa

By investing in transport infrastructure today, Africa sets the foundation for a future marked by connectivity, prosperity, and competitive trade. Modernised transport networks mean more than just economic gains; they enable educational access, healthcare provision, and social equity by reducing the disparities between rural and urban areas. In turn, these advancements empower communities, fostering inclusive and sustainable development.

Africa’s future lies in creating a transport infrastructure that supports trade, drives economic growth, and bridges socio-economic gaps. As African countries and private stakeholders work together to create efficient transport systems, the continent moves closer to a future where logistical challenges no longer hinder its potential. A well-connected Africa, equipped with modern infrastructure, can trade competitively, grow sustainably and provide better lives for its people.