Remarks by President Cyril Ramaphosa at the NEPAD Heads of State and Government Orientation Committee Meeting of the Presidential Infrastructure Championing Initiative

Excellencies,
Distinguished Guests, 

It is my pleasure to join you here this afternoon. South Africa as chair of the African Union (AU) looks forward to playing an active role in driving the   Presidential Infrastructure Championing Initiative (PICI).

Allow me to immediately thank my fellow Excellencies that have formed an integral part of the success of the PICI. I want to name the countries so that we have a sense of appreciation for the Country leadership efforts as regards the PICI:

•    Algeria
•    Benin
•    Cote D’Ivoire
•    Egypt
•    Kenya
•    Namibia
•    Nigeria
•    Republic of Congo
•    Rwanda
•    Senegal
•    The DRC

A special welcome is also to be extended to Sudan as the latest country to join the PICI, and who will be championing the Sawakin-Port Sudan Project. 

The PICI supports regional integration, economic development and industrialisation within the framework of ‘’Agenda 2063: the Africa we want”. 

As we collectively strive to meet our industrialization goals, infrastructure features heavily in Agenda 2063. 

The African Development Bank estimates that Africa’s infrastructure needs amount to some USD 130bn to USD 170bn a year. We need more dams, power plants, fibre optic cables and ports. But we also need more social infrastructure like roads, schools,  public housing and clinics.

As all developing countries we cannot sate our continent’s infrastructure hunger with our limited resources, and it goes without saying that this presents a major investment opportunity for our respective countries.

According to the AfDB the financing gap according to the Bank is between USD 68bn and USD 108bn. This means we must think creatively and expansively about how we can close this gap.

We also must be open to  various financing models such as public private partnerships, commercial loans, development funding, and sovereign bonds. 

Furthermore, as the Bank has noted, the excess savings in many advanced countries could be channelled into financing profitable infrastructure projects in Africa. 

The issue of risk in Africa is often exaggerated. The risk of loss in Africa is lower than in Latin America. Yet, funds are not being channelled into Africa. For example, there are $8 trillion of assets under management in London, but only 1% is invested in Africa. 

In South Africa for example we are in the process of setting up a National Infrastructure Fund to leverage investments from financial institutions, multilateral development banks, asset managers and commercial banks in both greenfield and brownfield projects.

South Africa assumes the chairship of the African Union at an immensely exciting time for the continent, as the African Continental Free Trade Agreement begins trading.

This is a milestone in the continental integration project, with Africa destined to become the biggest common market in the world. The implementation of this seminal agreement will boost intra-Africa trade, re-ignite industrialization, and pave the way for the meaningful integration of Africa into global value-chains and the global economy.

Ours is a continent on the rise. Consider for example that last year 17 African countries grew by 3% to 5% and 20 countries grew by 5% and above. Six of the fastest-growing economies in the world are in Africa. Foreign direct investments (FDI) to Africa grew at 11% last year, far exceeding the 4% growth in Asia, even as FDI declined by 13% globally and by 23% in developed economies. 

Africa is diversifying its international partnerships, thus broadening the scope of cooperation with various players. This will create further linkages for us to pursue infrastructure build on a massive scale.

There are large infrastructure projects in the pipeline being driven by the PICI like the Trans-Maghreb Highway in North Africa; the North-South Road, Rail and Related Infrastructure Corridor connecting extensive parts of Southern Africa; as well as the Central Corridor and the Abidjan-Lagos Corridor Highway.

The AU has designated some Heads of State as champions of trans-boundary infrastructure projects in the following sectors: Information and Communication Technologies, Transport, Energy, Water and Sanitation and Agriculture. 

This enables PICI Countries to provide the necessary strategic impetus for infrastructure build in the sub-regions and on the continent. 

South Africa champions the North-South Corridor/Rail Project and has over the years successfully convened a number of PICI Heads of State Breakfasts and luncheons as a precursor to the Heads of State Government Orientation Committee Infrastructure Subcommittee, where we report on progress to our counterparts and to the AU Summit. 

The underlying support structures include the PICI Africa-wide Inter-Ministerial Committee Meetings; the PICI South Africa Ministerial Task Team Meetings as well as the PICI Senior Officials Technical Meetings, which typically precede AU Summits. 

South Africa together with the PICI countries remains committed to ensuring the  PICI is central to the success of the Africa Continental Free Trade Agreement, as well to the AU’s Agenda 2063. 

The Report we have with regards to the PICI Continent wide Country Projects are as follows: 

•    The Kinshasa-Brazzaville Bridge Road/Rail Project-led by the Republic of Congo and the DRC; There has been excellent progress with unlocking the necessary funding. This was one of the key successes at the African Investment Forum that was held in Sandton, Johannesburg in November 2019;
•    The Abidjan-Lagos Highway Project-led by Cote D’I’voire; Cote D Ívoire formally submitted their PICI Project in 2019. Good progress has been reported and the AFDB has agreed to provide the necessary funding;
•    The Lake Victoria - Mediterranean Sea Navigational Line (VICMED)-led by Egypt; The prefeasibility was concluded successfully and Egypt will now proceed with the Feasibility Study;
•    Egypt also led on the Cairo to Cape Road Project-The progress report we received is that it has been very good;
•    The Lamu Port - Southern Sudan-Ethiopia Transport (LAPSSET) Corridor Project-led by Kenya; The progress has been good, Berth 1 was completed in 2019 and Berth 2 and 3 will be finalised by the end of 2020
•    Developing an International Logistics Hub-led by Namibia; The report we received is that progress has been very good;
•    The Trans-Sahara Gas Pipeline-led by Nigeria-There was no progress report on this project
•    ICT One Network Africa Broadband and Optic Fibre Projects Linking Neighbouring States-led by Rwanda-The report we have is that progress is proceeding very well
•    The Dakar-Bamaka Road/Rail Project-led by Senegal; The report we obtained was that progress has been slow
•    The Trans-Sahara Highway missing road links-led by Algeria; there has been notable progress reported;
•    The Optic Fibre Link between Algeria and Nigeria via Niger-led by Algeria; we will endeavor to get an update on progress with regard to this Project;  

The Sawakin-Port Sudan Project-will be led by Sudan who will be the latest country to join PICI in 2020

As political champion for the North South Road, Rail and Related Infrastructure Corridor South Africa also has progress to report.

We have shortlisted the following 4 projects for fast-tracking and implementation:

•    The Beitbridge Border Post; connecting South Africa and Zimbabwe together with related road and rail infrastructure
•    The Inga III Hydropower Project involving South Africa, the DRC, Namibia, Botswana and Angola
•    The Lesotho Highlands Water Project - Phase II (LHWP) involving South Africa and Lesotho
•    We are positioning ourselves to become a hub for the manufacture and supply of Rail Stock for Africa, in line with the AU Resolution.

We are pleased to report that there has been substantive and very good progress on all four projects.

Excellencies,

The PICI must continue to play a key role in meeting the aspirations of Agenda 2063: of increasing intra and inter-regional trade, of promoting road, rail and port infrastructure in the region; of using financial institutions to collaborate with the private sector to expand on the continent; and of identifying and promoting practical opportunities for cooperation based on complementary national endowments. 

The decisions we make now at the AU, and over the next few years, will have an extraordinary and enduring impact on our own fortunes as well as those of ordinary people on the continent, the sub regional level and at the global economy level, too. 

Where there are hurdles or blockages, we must resolve them. We must identify the missing links, chokepoints and bottlenecks that prevent the rapid development of the PICI and attend to them. 

Through the PICI, we have a perfect vehicle for attracting greater investment and for driving the developmental agendas of our respective countries.

I wish to reiterate the offer by Minister Mthembu that South Africa will host an International Financing Investment Conference where we will open up the PICI and the North South Corridor and the fast tracked projects for investment and take off; and a North South Corridor Road Show - led by Heads of State and our Ministers.

In conclusion, I wish to thank the AUDA-NEPAD Agency that schedules meetings together with the PICI, and in particular the CEO Dr. Ibrahim Assane Mayaki.

I thank you again for your presence and wish you all of the very best as you head off on your respective duties.  

I thank you.