Private equity investors have always celebrated the investment opportunities in consumer goods, financial services and telecommunications – obvious strategic plays on Africa’s growth and emerging middle class. But, investors are growingly turning their interest to sectors once perceived as ‘the leftovers’ (or better left to government officials and donors). Investors look at the continent’s need particularly for roads, ports, and electrical grids and see an opportunity for big returns.
Africa’s infrastructure problem is not a new one, but rather it is an expanding problem, as more and more is required to keep up with the robust growth across the continent. Africa’s annual infrastructure needs are estimated at $93 billion – approximately 15 percent of Africa’s GDP – with $48 million of the current bill unfunded. African governments have historically financed a substantial share of the continent’s infrastructure on balance sheet, with local banks unable to supply the amount and tenor necessary for loans, consequently leaving many projects unfunded.
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