Mixed potential for the acceleration of infrastructure investment in Middle East and Africa, says GlobalData
Many governments across the Middle East and Africa (MEA) region are attempting to step up investment in infrastructure to both support recovery from COVID-19 disruption and as part of ambitious strategic plans to promote the private sector, improve connectivity and enhance competitiveness. However, only eight of 20 markets assessed have good prospects to accelerate infrastructure investment, according to a study by GlobalData.
The company’s latest report, “Public Infrastructure Prospects - Middle East and Africa”*, Saudi Arabia, the UAE, Qatar and Egypt are considered to have relatively good prospects for accelerating infrastructure investment.
Danny Richards, Economist at GlobalData, comments: “Despite Saudi Arabia’s relatively weak fiscal position, the government is committed to major transport projects to stimulate the economy: not least with ongoing investment to improve transport links under metro systems and rapid transport projects.”
Sub-Saharan Africa has significant infrastructure needs, but funding remains insufficient, despite the huge opportunities for investment.
Richards continues: “Most governments in Sub-Saharan Africa have had to use limited resources to provide COVID-19 support policies. The immediate requirements to deal with both economic and humanitarian crises have generally prevented governments from being able to focus policies on infrastructure investment, however, efforts to boost growth will be stepped up. This will be driven by ongoing investment in infrastructure and the expansion of oil production, as well as expansion in the energy sector, to achieve sustainable social and economic development milestones, which will help make individual countries more resilient.”
GlobalData notes that, in Sub-Saharan Africa, Tanzania stands out as having good prospects for accelerating infrastructure, given its low debt position and an economy that avoided a recession in 2020. Others in the region considered to have good prospects include Cameroon, Ghana and Kenya.
* In assessing these prospects, GlobalData has taken into account the size of the pipeline of projects in each country, the composition of this pipeline in terms of stages of development, the political momentum behind infrastructure investment, the state of the government’s finance, and the economic recovery outlook.