ADDIS ABABA, Feb. 12 (Xinhua) -- Africa is facing a critical infrastructure funding gap amid declining official development assistance, African Union (AU) Commissioner for Infrastructure and Energy Lerato Dorothy Mataboge has said.
Briefing journalists Wednesday on the sidelines of the ongoing 48th Ordinary Session of the Executive Council of the AU at the AU headquarters in Addis Ababa, the capital of Ethiopia, Mataboge called on African nations to enhance domestic resource mobilization to address the funding shortfall to support the continent's infrastructure development.
"We find that globally capital is more expensive and even more so for the African continent, and that our development assistance is declining," she said. "Africa needs to unlock domestic resources, including pension funds to meet its core infrastructure needs."
The funding shortfall not only affected infrastructure development across the continent, but also held back the continent's growth, slowed competitiveness and trading among AU members, Mataboge said.
According to the AU, Africa's infrastructure needs are estimated at 130-170 billion U.S. dollars annually, and the funding gap is costing the continent a 2 percent annual reduction in its gross domestic product growth.
The commissioner called for the adoption of innovative financing solutions through domestic resource mobilization, strengthening African multilateral institutions, and negotiating effectively with international partners to tap into its resources and finance infrastructure development projects.
"It's about strengthening our ability to negotiate with partners better so that our infrastructure projects are anchored on local content, local skills and local products. Whether we're talking about steel or cement, that is going to be actually delivering the infrastructure needed to the continent," she said.
Finance has been a critical challenge for infrastructural development in Africa and many African countries are in a financial dilemma, Mataboge said.
"Many African countries are unable to tap into domestic resources for infrastructural development, and international loans are expensive. Besides, many countries are experiencing poor credit rating, which means the cost of borrowing is much higher for them in the financial markets," she added. ■