Workshop: Roundtable on Stimulating Private Investment in Infrastructure in Africa and South Asia

Much of the developing world, particularly Sub-Saharan Africa and South Asia, is suffering from a severe lack of necessary infrastructure. On 27 February 2014, following the G8/G20 commitment to infrastructure development in developing countries, the IGC hosted a round table discussion on the risks and organisational failures which are hampering greater investment flows into this critical area.

The round table brought together academic expertise, private-sector experience, and public-sector practitioners, with participants including Professor Paul Collier, Lord Green (former UK Trade Minister and Chairman of HSBC), Jay Ireland (CEO, GE Africa), Bernie Sheahan (Director of Infrastructure and Natural Resources, IFC), Michel Wormser (Vice President and Chief Operating Officer, MIGA), and Charles Boamah (Vice President (Finance), African Development Bank). The objective of the meeting was to bring together perspectives of practitioners, who had the in-depth understanding of the practical barriers to investing in infrastructure in these markets and could assess the capabilities of governments and official institutions to overcome these barriers, and academics, who had both the incentives and time to consider possible ways of addressing these problems. They engaged in four very productive sessions outlining many of the real barriers to the linking of these projects and capital as well as various possible first steps.

The barriers identified were diverse. The primary barrier identified was the perceived risk of these infrastructure projects in developing countries. There are significant risks that stand out, primarily those of a political nature. The lack of a specialised presence on the ground in these developing countries to help identify the projects that are likely to be profitable was also cited as a major limiting factor. What was evident, however, was that the will to begin trying to make these investments is present from both the host country side and the investor side, if these risks and limitations can be overcome. The discussions were very productive to this end, and a series of possible first steps were highlighted. These ranged from broad policy areas, such as sector regulation and national infrastructure plans, to very specific potential solutions, such as amending credit rating regulations.

The IGC will continue to follow-up on these discussions in coming meetings to further this agenda over the coming months as well as to explore other possible solutions. A jointly hosted seminar with the African Development Bank and the OECD was held on 15 July 2014 (link below).