The ballers dem a ball
Angola like Atlanta
A pure plane take off
– Damian Marley & Nas (Land of Promise)
In the first article in this series, we talked a bit about how communities like Gatiki in Kenya are building infrastructure for themselves given the government’s penchant for inaction in this respect. However, I’ll be the first person to admit that while this form of community action is in itself impressive, it does not scale. No doubt, while a road or an electrification network in your small rural town does a little more than marginally improve the lives of the few thousand people in your village, the kind of infrastructure that will really make the difference are the more massive national scale projects that run into billions of dollars.
Thankfully, especially because of the government’s general incapacity in this area, there is a slow but sure revolution in infrastructure funding and development which is taking the world by storm. While our government prefers to waste its quickly depleting budget (yay to low oil prices!), propping up a bloated and dysfunctional civil service, and covering unnecessary overheads like fuel subsidy for the top one percent of the populations, private individuals, foreign governments and financial institutions are investing in large-scale capital-intensive infrastructure projects in Africa.
As with all things this disruptive, this amazing revolution is brought to you by the same crazies that gave you a $100 billion social network last week – Silicon Valley.
I first heard about Sokoni this time last year from a respected mentor who is personally involved but I didn’t really understand what they were doing until I had a chance to sit down and chat with a staff of the parent company, Zanbato on a fairly recent trip to New York. Sokoni, which is Swahili for market place, is a partnership between the African Development Bank and parent company, Zanbato is developing an online market place for African infrastructure investment opportunities. You can think about is as a Kickstarter for infrastructure.
Global capital providers, high net worth individuals and potential donors interested in investing in African countries can easily and quickly view and review details of infrastructure investment opportunities from all over Africa and express interest in the opportunities they find most lucrative. Of course, their interest in funding African infrastructure isn’t inspired by heart wrenching images of poor Africans. Investments in African infrastructure could generate a potential $200 billion in annual revenue for private investors by 2020.
You see, the real revolution with Sokoni isn’t even really the ready access to capital for promising infrastructure projects it represents. After all, capital will eventually flow to where returns are highest, in spite of ten-percenters. The incredible revolution with Sokoni is the radical transparency it forces with the whole infrastructure funding process.
We all know seeking funding for large-scale infrastructure projects generally starts with an incredible expensive vacation on the national credit card to the first world in search of “foreign investment”. By God’s grace, between hours spent buying the entire mall for wives and “baby girls” with ‘estacode’, they might somehow find the time to get to a meeting with a few serious foreign investors –probably a couple disdainful hours late. “How can I bring more investment to my country?” the government official will ask. And you have to wonder for Mr. Government Official, isn’t that why you are here? Anyways, I digress.
At the end of the day, most of these visits come to naught because of how risky and oblique most of these deals are. More importantly, these oyibos who really value their time know this approach to seeking infrastructure funding doesn’t scale well hence the need for an investment platform like Sokoni. Given the situation, currently, most infrastructure projects are financed by the World Bank and a few other dedicated funding sources. Even when private money that comes in through domestic proxies or serious banks, the lack of transparency in the whole process makes one wonder if the country is getting the best deals long term especially since winning bids for these kinds of lucrative investment opportunities are routinely allotted to Dangotes, Babalakins and Tinubu associates with closer than appropriate ties to the ruling governments.
Government officials clouded by a couple kickbacks usually end up subjecting subsequent governments to ridiculous imbalanced infrastructure funding arrangements more akin to indentured servitude than serious business relationships. Sokoni will increase competition for truly lucrative infrastructure projects so governments and by extension the people can get the best possible funding bids from around the world whether corrupt officials like it or not.
Maybe, just maybe, when Silicon Valley is done with helping us solve these lower level infrastructure headaches, our children will have the time and peace of mind to build the next Instragram. For now, aluta continua.
Editor’s note: Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.