Africa Infrastructure Deficit Widening, SABMiller Chairman Says

The lack of basic infrastructure in Africa is hampering investments by companies such as SABMiller Plc (SAB) and Bharti Airtel Ltd (BHARTI), said their chairmen.

“Heroic endeavors” are often required in remote parts of Africa to move products to markets or across borders, SABMiller’s Graham Mackay, who is also chief executive officer, said today at a panel discussing risks on the continent at the World Economic Forum in Davos, Switzerland. “On balance, the infrastructure deficit is widening rather than narrowing.”

Africa needs $93 billion per year over a decade to improve infrastructure, with almost half of that required to boost power supply, according to the World Bank. The economies of sub- Saharan African countries will expand 5.3 percent this year, the same pace as 2012 and higher than the global figure of 3.6 percent, the International Monetary Fund estimates.

Nigerian President Goodluck Jonathan, who also attended the panel, said it was easier to move between Africa and other parts of the world than within the continent. Nigeria, Africa’s largest oil producer and most populous country with more than 160 million people, has electricity production capacity of about 4,000 megawatts, less than half of total demand.

“The infrastructure gap is significant in Africa,” said Jonathan, who was elected in 2011 on pledges to increase power supply, build roads and bridges, and fix refineries.

‘Biggest Risk’

Lack of such facilities is “the biggest risk to Africa’s growth,” Bharti chairman Sunil Mittal said, praising Ghana, Rwanda, South Africa and some regions of Nigeria for development. He said countries where the gap is widest include the Democratic Republic of Congo, Niger, Chad and Sierra Leone.

“There are some changes, but if you ask me are the infrastructure investments keeping up with economic growth, I’d say no,” Mackay said. Africa’s economic growth could be doubled “quite easily,” with the required measures, he said.

Areas that need improvement include roads, bridges, electricity and water supply, refuse removal and sewage, according to Mackay. He cited South Africa as an exception where “hard infrastructure” is better than many other African and non-African countries.

To contact the reporter on this story: Maram Mazen in Abuja at mmazen@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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