There is no doubt that the major difference between Africa and the west is the level of infrastructure development. The major components of infrastructure that I am talking about are transportation (roads, highways, tunnels, bridges, sea ports and airports), clean water distribution, waste water & sewage collection, internet & voice connectivity and electricity. Even in a city like Johannesburg, which has very high levels of transportation, sewage and water facilities, the lack of focus on electricity development over the past 20 years has now forced residents to have power load sharing where they will go without electricity for several hours a day. Dropped calls in Africa happen several times a day every day while some people in the west can go a year or more without experiencing a dropped call. It is a marked difference.
Most of Africa is much less developed (with regards to infrastructure) than South Africa and there are major deficiencies in all five of these major infrastructure aspects. The difficulties can be overcome, and there are short term fixes to most of these problems, however the truth is that the cost of the average consumer ends up being higher when you have to factor in the inefficiencies of transportation, higher electricity costs, connectivity and communication delay costs and higher costs of clean and waste water transportation. The estimated losses or extra costs to businesses can roughly be estimated at 40% when compared with the west, depending on various factors and can be much higher.
Unfortunately, not all governments in Africa use tax revenues in the most efficient way possible and money spent on infrastructure is way below what it should be to help economies grow. In many markets, infrastructure falls well below 40% of spending when developing markets should be spending upwards of 75% of revenues on improving infrastructure. Infrastructure is rarely a sexy way to spend tax dollars despite the inherent benefits to society that this will eventually lead to. The truth is now that most governments do not have the necessary tax base to be able to afford these types of costs in the manner which could have gotten them built in the past. (call to tender and contract going to the lowest bidder) Many larger infrastructure engineering and construction firms are hesitant to deal with governments who might change leadership before the project is completed and/or risk not getting paid for political reasons.
New methods of getting projects completed are needed in order to do the massive amount of work required in cities throughout Africa in each of the major infrastructure areas. Electricity networks (powered by clean solar, wind or hydro) to replace the massive diesel generators which litter the African landscape. Major increases in transportation options (public trains, major highways, bridges and tunnels and more modern airports). Efficient waste water and sewage collection systems, and a full system for clean water to every residence and business. More money to be spent on reliable communications systems not burdened by over-demand, and/or new technologies to reduce bandwidth burdens should be implemented as well.
Some of these issues can be tackled by business alone if they see the value in providing the service and can see the returns that would come from that investment, however in many cases governments do have to step in to create incentives for businesses to improve infrastructure throughout much of the continent. Until there is a greater focus on this, the differences between Africa and the west will continue to grow. Technology may reduce the burden somewhat, but the focus of elected officials throughout Africa should be on ensuring that these key infrastructure points are addressed quickly and properly.
Derek Kopke is a senior business development executive and consultant. He’s traveled to over 65 countries and closed sales in over 80 countries across the globe. With an undergrad in education and an MBA in International Business, his unique world view and experience with cultures globally give him valuable experience which he has used to the benefit of companies interested in growing overseas. Derek is based in Montreal, Canada along with his wife and two teenage children.
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