Infrastructure in Africa for Extractive Industries and Corporate Profits: What about Community Needs?

472-km Mombasa-Nairobi Standard-Gauge Railway

The mega-infrastructure corridors prioritized in ambitious investment programmes spanning the african continent are squarely focused on facilitating the export of minerals and agricultural commodity crops and the import of processed foods and manufactured goods.

The discourse about infrastructure across the African continent is plagued – perhaps more so than elsewhere - by a staggering contradiction: The rhetoric from governments, development banks and investment analysts is heavy on ordinary peoples’ infrastructure needs for sanitation, clean drinking water, affordable and reliable electricity and internet connectivity and roads for small scale farmers to bring their produce to market and small enterprises to prosper. Using these basic and undeniable needs for infrastructure, they emphasise the sound of clean drinking water being delivered to households across growing sub-Saharan African cities as 'the sound of prosperity, and the promise of opportunity' – and then, prioritize a totally different kind of infrastructure.

The infrastructure highlighted for priority funding in ambitious investment programmes spanning the entire continent is squarely focused on facilitating the export of minerals and agricultural commodity crops and the import of processed foods and manufactured goods. "Most international interest in big infrastructure projects depends on whether or not these projects deliver an export revenue stream," an investment analyst notes. (1) A casual look at the maps outlining planned and internationally funded large infrastructure projects highlights this export-focus with little to no regard for the infrastructure needs of the majority of the population. (2) As Rudo Sanyanga from the NGO International Rivers points out in her 2018 article for the WRM Bulletin (3), several questions need to be asked before planning further infrastructure across the continent: “What kind of infrastructure do we need? And does it meet our own development goals? Decision-makers need to deliberately target infrastructure which respects social and environmental concerns, for servicing the majority of people who need the energy and to define milestones to assess progress.”

In 2012, the 55 members of the African Union adopted, in partnership with the UN Economic Commission for Africa and the African Development Bank, the Programme of Infrastructure Development for Africa (PIDA) (4), a multi-billion dollar initiative to promote transboundary and intra-regional infrastructure in four key priority areas: energy, transport, water, and ICT (information and communication technology). While infrastructure in these sectors is essential for providing basic needs, it is another kind of infrastructure in these same sectors that is being prioritized for construction of the backbone of industrial, export-oriented, not people-oriented “development.

Who would benefit from infrastructure thus fundamentally depends on the kind of infrastructure that is being built and planned: roads that cater to the needs of the majority of the population or super-highways and toll-roads for giant trucks and transport of heavy goods; railways that increase the mobility of people or that bypass cities so the minerals can be taken as fast as possible from the mines to the ports; electricity lines and power generating infrastructure that provides communities and the majority population in urban centres with affordable energy or mega-dams marred in conflict because whole communities will be evicted, their land flooded yet the electricity generated is destined to industrial hubs around mines and ports.

According to the 2018 PIDA Progress Report, its Priority Action Plan aims to implement key transboundary infrastructure projects “with the potential to interconnect, integrate and contribute to structural transformation of Africa’s geographic and economic regions by 2020.” (5) From its more than 400 projects overall and its 51 priority projects, 20 have been completed or are under construction, including the Algiers-Lagos trans-Saharan highway, the Lagos-Abidjan transport corridor, the Zambia-Tanzania-Kenya power transmission line and the Brazzaville-Kinshasa bridge. The PIDA priorities underline the focus on infrastructure that feeds corporate greed, not people's needs: These mega-infrastructure corridors bypass or steamroll communities to connect the sites of mining and energy generation with export hubs and ports.

The 2018 report also highlights that, at the time of writing, 44 out of the 55 African Union member states had signed the consolidated text of the African Continental Free Trade Area (AfCFTA). Even though some countries have not ratified it, it has already entered into force. PIDA directly contributes to the plans of AfCFTA for intra-continental infrastructure corridors as a pre-requisite for cross-continental (corporate and industrial) trade. What all these plans fail to provide is a convincing narrative on how these gigantic infrastructure corridors could possibly cater to the needs for basic sanitation, water, electricity and internet connectivity of the majority population.

China’s mega-infrastructure plan, the Belt and Road Initiative (BRI), is also branching out into African territories. Launched in 2013, BRI envisions a land-based “belt” connecting China with Europe and a sea-based “road” crossing the Indian Ocean to East Africa up through the Mediterranean and reaching over the Pacific as far as Oceania and Latin America. The Algiers-Lagos trans-Saharan highway, for example, one of PIDA’s priority projects, is already linked to BRI development in Africa. (6)

BRI plans to close some of the missing links of major transport corridors while speeding up the implementation of PIDA’s priority projects and flagship projects on the African Union’s Agenda, such as the African integrated high-speed railway network.

Chinese companies are building ports and sea infrastructure funded by Chinese investors to upgrade the route from South Asia to Kenya and Tanzania and up to the Mediterranean via Djibouti. Inland railways are also being built. Moreover, Chinese investments have been flowing into agro-industrial parks in Mozambique, Uganda, Zambia and other countries. China has begun to expand its agro-industrial investments under the banner of the BRI. (7)

BRI – along with regional and continental infrastructure programmes such as PIDA - are set to reconfigure large territories, turning them into production and distribution zones, with warehouses, railways, terminals, waterways, ports and export-import zones. As NGO GRAIN points out, due to its vast geographic scale and massive investment, BRI will also increase the concentration of global food production and distribution, potentially pushing small-scale farmers, fisherfolk, forest peoples and rural communities further to the margins and restricting their access to land. Concerns are growing that BRI will lead to land grabs and human rights abuses; push state governments into even deeper indebtedness and cause major ecological destruction and health impacts in the target countries. (8)

Loans and public-private partnerships

Both China's BRI investments and PIDA project implementation are extensively using public-private partnership models. Championed as a smart way for governments to use public money to attract significant private investment by offsetting the risks for private investors, the reality of PPPs has seen corporations pocketing exorbitant profits while public institutions shoulder all the risks. (9)

A recent article from African news portal Pambazuka (10) revealed how a concessional loan of over US 2.3 billion dollars is earmarked for the construction of 273 kilometres of rails between Uganda’s capital Kampala and Kenya's Indian Ocean port city of Mombasa. Further extension to Juba, South Sudan, and Kigali, Rwanda, is expected in the future. The first stretch of the line between Mombasa and Nairobi was inaugurated in mid-2017 and celebrated by state governments and financial institutions as another milestone of Chinese-African development cooperation. The project received funding from the European Investment Bank, the German development bank (KfW) and the African Development Bank.

However, corruption, embezzlement, human right violations and unmet deadlines are few of the problems surrounding these projects. (11) The recently leaked loan contract signed in 2014 by state-owned Kenya Railways and China’s Exim Bank reveals significant legal risks for Kenya in case Kenya defaults on the loan – a likely scenario considering the amount of debt the government has amassed in recent years. In addition to these secret contractual risks, construction of the Mombasa - Nairobi port access road is linked to severe human and collective rights violations, including force evictions and threats and intimidation strategies used towards affected communities. (12)

And this is no exception. The easy availability of infrastructure credits linked with the arrival of the BRI on the African continent brings sizeable risks to communities whose territories are located along the priority corporate infrastructure corridors. There has been a rush to generate projects, particularly for generation and transmission of electricity and transportation. These projects enjoy political backing from the highest levels of government, and few questions appear to be asked by governments tasked with providing infrastructure for the basic needs of a country's population on whether these mega-projects will address the genuine infrastructure needs of the majority of the population. There are many cases in which, if a project built as part of a PPP-contract fails (or fails to maintain the expected profit levels of the private investor), governments and citizens absorb exorbitant costs over decades.

In Tanzania, the BRI-associated US 10 billion dollars Bagamoyo Deepwater Port and Special Economic Zone project - a joint venture between the Tanzanian government and China Merchants Holdings International - was initially suspended in 2016 for lack of funds. The Tanzanian government's funding constraints meant that it had to forego its equity stake in the project. As a result, the government now risks losing project ownership and access to long-term revenues from the project. (13)

Dams: electricity for community needs or for corporate greed?

Pointing to the low level of access to electricity and the comparatively high costs to households, PIDA proposes a number of new power plants and transmission lines spanning the continent. Within the PIDA Priority Action Plan there are 13 large dams, including very controversial projects: The Inga 3 Dam on the Congo River, the Grand Renaissance Dam on Ethiopia’s Blue Nile, and the Mphanda Nkuwa and Batoka Gorge Dams on the Zambezi.

But, who will benefit from the energy generated by these dams? Most probably not the people who need electrification the most. The estimated 4,800 MW to be produced by the Inga 3 Dam in the Democratic Republic of Congo, for example, are earmarked to supply mining companies in the country’s East and for export to South Africa. The same goes for the Mphanda Nkuwa dam in Mozambique. The government hopes that the dam will attract energy-intensive industries to the country. But for the foreseeable future, much of its electricity will be exported to South Africa. (14)

Looking at who receives access to electricity and who is bypassed provides one indication for understanding who profits and who pays for the infrastructure boom on the African continent. The question of land provides another. According to a recent report from International Rivers, “over 100,000 people would have to be moved to make way for reservoirs that would be filled behind the PIDA dams. The social disruption that dam-induced resettlement has engendered is long-lasting and multi-generational.” (15)

“If you want to prosper, first build roads”?

If evictions and destruction of fertile agricultural land in the path of these mega-infrastructure corridors are added to the equation, it becomes even clearer that the Chinese proverb 'If you want to prosper, first build roads' isn't going to deliver for the overwhelming majority of people across the African continent. What is needed is a different kind of roads, railways, electricity generation and other infrastructure to prosper than the mega-corridors at the heart of PIDA, BRI and others. The risks are high that the kind of infrastructure promoted by those plans will be suffering, loss of land and violent clashes, not prosper and food sovereignty for peasant communities and forest peoples.

(1) Africa seeks new solutions to its infrastructure needs. Euromoney. 03 October 2018.
(2) Overview maps, among others: Deloitte (2019): If you want to prosper, consider building roads. See also the webpage of the Africa Infrastructure Knowledge Programme.
(3) WRM Bulletin, Large Hydro-power dams are not the answer: Time to re-think Africa’s energy infrastructure, Rudo Sanyanga, January 2018
(4) See the PIDA website
(5) 2018 PIDA Progress Report
(6) OBOReurope, Algeria on the new silk roads
(7) GRAIN; The Belt and Road Initiative: Chinese agribusiness going global, February 2019
(8) idem
(9) Nicholas Hildyard (2016): Licensed larceny. Infrastructure, financial extraction and the global South.
(10) Pambazuka News, “Fixing” Africa’s infrastructure: But at what price?, Tim Zajontz, February 2019
(11) Finance Uncovered, Two years after we exposed Rift Valley Railways, World Bank corruption probe sanctions companies, 2018
(12) Counter Balance, Development in Reverse, the Mombasa Road, February 2019
(13) Dixon I. and Kishore S., The infrastructure footrace: Why China fits into Africa’s plans for development? February 2019
(14) International Rivers, Mphanda Nkuwa Dam, Mozambique
(15) International Rivers, Right priorities for Africa’s Power Sector. An evaluation of dams under the PIDA, Rudo Sanyanga