Africa’s infrastructure crisis: Addressing debt and sustainability

Saliem Fakir, Executive Director of the African Climate Foundation, breaks down Africa’s urgent need for large-scale infrastructure financing, specifically looking at the continent’s relationship with debt.

While the continent needs around $90 billion per annum of investment, maybe more, all the nations are dealing with issues of debt, worsening post-COVID-19. A G20 experts panel specifically look at debt growth and development this year, specifically considering the mismatch between how Africa’s debt is perceived from the outside, versus the reality of conditions on the ground.

“I do think that one way to do that is to look at how you can reprofile the debt currently to lower the cost. But, then you need more debt to actually grow the economy and you must be able to put that money to good use.

“Of course choices like infrastructure, being able to build the infrastructure with interconnections with other with other economic activity like diversification of the economic sectors, that could make that work, and you could have a growth path that can sustain the long-term infrastructure.”

Fakir also warned African nations must adopt coordinated strategies to navigate the European Union’s Carbon Border Adjustment Mechanism (CBAM).

He explained that countries most exposed to CBAM – including South Africa, Nigeria and Egypt – need to prepare through coherent, collaborative approaches. However, he questioned whether the EU would enforce the mechanism fully amid internal resistance and mounting industrial costs.