Despite its immense potential, Africa’s infrastructure deficit currently reduces its economic growth by 2% annually and cuts productivity by up to 40%. To address this, the Programme for Infrastructure Development in Africa (PIDA) was launched in 2011 as a continental effort to fast-track development and regional integration. A new list of 69 PIDA projects, with an estimated cost of $160.8 billion, has been adopted by the African Union to stimulate trade and foster inclusive growth.
These projects are crucial for achieving the goals of the African Continental Free Trade Area (AfCFTA), which seeks to create a single market of 1.3 billion people. According to the Economic Commission for Africa (ECA), while intra-African trade currently stands at just 15%, adequate infrastructure combined with AfCFTA implementation could increase this figure to 33%. The Lamu Port, South Sudan-Ethiopia Transport (LAPSSET) Corridor is cited as a prime example of a transformative project that enhances connectivity and reduces trade costs. .
Financing these projects is a major challenge, with an annual funding gap of up to $108 billion. African countries are exploring innovative de-risking mechanisms to attract private sector participation. The African Development Bank (AfDB) has a financing strategy that encourages member states to use domestic resources and explore options like public-private partnerships. The ECA also notes that PIDA can be a strategic platform for partnerships with non-African entities, such as those involved in Europe’s Global Gateway initiative, to help bridge the funding gap.
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