Africa’s Growing Infrastructure Gap Must Be Urgently Addressed to Unlock Economic Growth, Warns PIC’s Lucky Pane
Africa’s growing infrastructure gap must be urgently addressed to unlock economic growth, warns PIC’s Lucky Pane, as the continent faces an annual shortfall of between $130 billion and $170 billion that hinders progress and threatens sustainable development goals.
Urgent Call Amid Mounting Challenges
Executive head of research and project development at the Public Investment Corporation (PIC), Lucky Pane, has sounded the alarm on Africa’s widening infrastructure gap, stressing that it needs immediate action as the continent battles with growth hurdles. His plea forms part of vital discussions at ongoing G20 talks in South Africa, building up to the leaders’ summit in November. Pane pointed out that fixing roads, bridges, railways and power lines is key to boosting trade and helping emerging economies thrive, but current shortfalls are putting the brakes on advancement.
He explained that these infrastructure woes hold back economic growth, lower productivity and stunt the rise of fresh and expanding industries. “Without the capital needed, we will continue to face the challenge and we’ll not be able to achieve the sustainable development goals,” Pane said. He pegged the yearly gap at between $130 billion and $170 billion. “It is quite essential that we address this to unlock the economic growth and inclusive growth.”
This warning comes at a time when Africa is dealing with its worst infrastructure crunch in years, made worse by the aftermath of the Covid-19 pandemic, climate change hits and global money squeezes. With nearly 1.5 billion people across the continent, poor roads, unreliable power and weak transport links mean businesses struggle to grow, farmers cannot get goods to market and communities stay cut off from basic services like clean water and health care.
Breaking Down the Massive Gap
The figures are stark. According to the African Development Bank (AfDB), Africa needs $130 billion to $170 billion each year to build and maintain essential infrastructure, but current spending sits at around $80 billion. This leaves a funding shortfall of $68 billion to $108 billion annually. Governments chip in about 40% of what’s invested now, but that is not enough to close the hole. Without more cash flowing in, experts say the continent’s GDP growth drops by about 2% every year, keeping millions trapped in poverty.
Sectors hit hardest include energy, where blackouts cost economies billions; transport, with crumbling roads and ports slowing trade; water and sanitation, leaving many without safe supplies; and digital networks, vital for modern jobs but lagging far behind. For instance, only a fraction of Africans have reliable internet, holding back education and business in the digital age. The gap also fuels other problems, like illicit financial flows draining $50 billion to $115 billion yearly, which could otherwise fund projects.
Recent reports drive this home. In February 2025, the “The Missing Connection: Unlocking Sustainable Infrastructure Financing in Africa” report, put together by the Africa-Europe Foundation, African Union Development Agency (AUDA-NEPAD) and African Climate Foundation, called for tapping into fresh funds without piling on more debt. It stressed linking sectors like energy, transport, water and digital to create joined-up projects that lift whole communities and spur green growth.
Then, in July 2025, the PIC released its own paper, “Accelerating Infrastructure Development in Africa: Strategies to Reduce Lead Times.” Pane, a key figure behind it, highlighted that a shocking 80% of infrastructure projects on the continent get stuck before they start. The paper pushes for quicker project prep, better rules and smarter ways to draw in private money. It suggests reforms in public-private partnerships (PPPs) to make them work better, cutting down delays that can stretch for years and cost extra billions.
Impacts on Growth and Daily Life
The fallout from this gap touches every corner of life. In rural spots, bad roads mean kids miss school and sick people cannot reach clinics fast. In cities, power cuts shut factories and shops, leading to job losses. New industries, like tech start-ups or green energy firms, find it hard to take off without solid basics in place. Pane noted how this suppresses productivity, making it tougher for African nations to compete globally and hit the United Nations’ Sustainable Development Goals (SDGs) by 2030. Goals like no poverty, clean energy and decent work all depend on better infrastructure.
Take energy as an example. Africa has huge potential in solar, wind and hydro, but without grids to carry power, much of it goes to waste. The continent added over 6.5 gigawatts of big-scale power in 2024, but that pales next to India’s 18 gigawatts in renewables alone. Water issues are just as bad – millions lack safe drinking sources, sparking health crises and holding back farming, which feeds most people.
Climate change adds fuel to the fire. Storms and droughts wreck existing setups, like bridges washed away or dams running dry. The AfDB warns the gap could widen if we do not build tougher, greener systems. This ties into bigger global talks, where Africa pushes for fair funding to fight warming while growing its economy.
G20 Talks Shine a Spotlight
Pane’s words feed into South Africa’s G20 presidency, running from December 2024 to November 2025. As host, the country is driving chats on infrastructure, with a legacy plan called the UBUNTU Approach: Moving Forward Together. This focuses on speeding up cross-border projects, like shared railways or power lines between nations, to boost trade and unity.
A key meeting in Pretoria recently brought together 15 African countries, the African Union and regional groups to rethink the gap after Covid. They agreed on four pillars: better data for planning, creating a list of ready-to-go projects, a governance council for advice and new ways to fund, like bonds or PPPs. Multilateral banks, such as the AfDB, are urged to cut risks so private cash flows in.
South Africa’s Deputy Finance Minister, Dr David Masondo, echoed Pane in a speech, saying the $130-170 billion yearly hole must be filled to drive growth. The G20’s business arm, B20, also calls for closing the gap to ensure lasting progress. With the summit looming, leaders aim to unlock trillions in global funds, including $4 trillion sitting in African pension pots and sovereign wealth funds that could be tapped locally.
Digital infrastructure gets a nod too. South Africa’s G20 agenda pushes for inclusive AI and digital public systems, linking them to physical builds like fibre cables. This could transform how Africa does business, from online trade to smart farming.
Paths to Solutions and Hope
Hope lies in smart fixes. The PIC paper suggests slashing project lead times through streamlined approvals and early risk checks. PPPs, if reformed with clear rules and fair shares, can bring private know-how and cash. Tools like the NEPAD Infrastructure Projects Preparation Facility help get plans off the ground.
Partnerships matter. The Africa-Europe tie-up could unlock $2.3 trillion in overseas funds via the EU’s Global Gateway. Fighting illicit flows and using digital tools for transparent tracking can free up billions. Events like the Africa Water Investment Summit in Cape Town this August 2025 aim to rally funds for water projects, a big chunk of the gap.
Domestic muscle is key too. The Africa Finance Corporation (AFC) says the continent has $4 trillion in local capital from pensions and insurers ready to invest if risks drop. Blended finance – mixing public aid with private loans – can make deals sweeter.
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