Kampala: The African Development Bank (AfDB) is expected to nearly double its infrastructure funding on the continent in five years' time to $10 billion to accelerate economic growth, a senior official told Reuters on Monday.
Alex Rugamba, the bank's director for regional integration and trade, said in an interview on the sidelines of the African Union summit a recent increase in the bank's core capital had allowed it to allocate more funds for infrastructural projects. "We want to double our infrastructure funding," he said.
"There's a big interest in projects that can transform economies. For instance there's big talk about railways. We want to revamp our railways. So if the trends continue as they are now, I would say within five years' time we'll be committing up to $10 billion per year on infrastructure."
The Bank, a key source of cheap credit for some of Africa's poorest economies, spends between $5-6 billion annually in infrastructure funding, he said.
Uganda's President Yoweri Museveni and other African leaders have decried the slow expansion of the continent's economic and social infrastructure as a primary obstacle to ending poverty.
Rugamba said the AfDB was keen on cross-border infrastructure ventures to promote trade within and between African countries and drive economic growth. He indentified some of them as regional power grids, highways that link neighbouring countries and submarine cables.
Rugamba said Africa's potential to absorb large injections of infrastructure funding was always there, but the AfDB's low capital was limiting its capacity to meet demand for credit.
Countries such as South Africa, Morocco, Egypt and Tunisia were taking in enormous amounts of credit annually, he said. "South Africa last year took a loan of over $2 billion, which is almost about half our annual infrastructure budget and Egypt now takes in $400 million worth of credit for its energy sector per year," he said.