The BGFIBank Group, the leading financial institution in Central Africa, operating in 11 countries, has been supporting and financing infrastructure projects across the continent for over five decades. Its Chairman and Chief Executive Officer, Henri-Claude Oyima, analyses the challenges and prospects of the infrastructure sector in Africa.

What are today’s infrastructure financing needs in Africa?

There is no doubt that the lack of infrastructure in Africa represents a major obstacle to its development and economic growth. High production costs—largely driven by poor-quality infrastructure—cause the continent to lose several percentage points of growth each year and significantly hamper its development.

Moreover, Africa faces the challenge of strong demographic growth, which further increases the urgency to accelerate infrastructure investment. By 2050, the African continent is expected to host around 2.3 billion people. In this context, developing a high-quality infrastructure network has become an absolute necessity.

Although significant progress has been made in recent years with the support of multilateral partners and China—now a key player—Africa’s infrastructure needs remain substantial across most sectors.

From transport and telecommunications to energy, water supply, healthcare and education, massive investments are still required to close Africa’s infrastructure gap. According to recent estimates by the African Development Bank, between USD 130 and 170 billion per year would be needed to bridge the continent’s infrastructure financing gap.

Beyond financing needs, Africa’s infrastructure sector also suffers from a shortage of technical expertise and design-related challenges, which weigh heavily on social and economic development—despite the continent’s many strengths and attractive investment prospects.

Today more than ever, Africa needs both structural and superstructural infrastructure to enhance competitiveness, productivity and social and economic development. To achieve this, innovative and tailored financing mechanisms are essential.

What role does BGFIBank play, and which sectors and countries does it support?

For nearly fifty years, the BGFIBank Group—the leading financial player in Central Africa—has been actively involved in financing African infrastructure projects. We operate across our eleven countries of presence and support multiple high-impact sectors, including energy, water, housing, construction, industry, healthcare and education.

These investments allow us to play a leading role in achieving both Goal 10 of the African Union’s Agenda 2063 (“World-class infrastructure across Africa”) and the Sustainable Development Goals (SDGs), over 80% of which depend, in one way or another, on infrastructure development.

To illustrate our involvement, I will highlight three recent examples:

• In Côte d’Ivoire, we actively contributed to financing the 2017–2019 Road Maintenance Program, helping raise CFA francs 80 billion (approximately EUR 122 million) through our subsidiary BGFI Capital, thereby supporting a high-quality road network and enhancing the country’s attractiveness.
• In Gabon, we mobilized significant financing in the telecommunications sector, enabling 85% national coverage and the rollout of 3G and later 4G services.
• In Cameroon, where we have operated for over ten years, we supported infrastructure investments—particularly in social infrastructure, energy and industry—totaling CFA francs 175 billion (approximately EUR 270 million).

We intervene both upstream and downstream in infrastructure projects.
Upstream, through BGFI Capital, our investment banking arm, we provide structuring expertise and act as lead arranger.
Downstream, we ensure the disbursement and day-to-day management of financing flows through our extensive network of subsidiaries and branches.

How does BGFIBank finance infrastructure projects?

BGFIBank’s support is multifaceted and relies on complementary financing tools. Depending on project needs, our role may include advisory services, lead arranging, lending and agency functions.

We also deploy traditional financing instruments such as medium-term loans, working capital financing, letters of credit, guarantees and bonds.

Who are the key stakeholders in infrastructure projects?

Given their scale and complexity, infrastructure projects typically involve multiple stakeholders: governments and public agencies, multilateral lenders, commercial banks, technical consultants, private-sector contractors, and professional experts such as lawyers, auditors and environmental specialists.

In Africa, the quality of partnerships and the continuity of dialogue between stakeholders are decisive factors for project success.

What are BGFIBank’s ambitions ahead of its next strategic plan?

Starting next January, the BGFIBank Group will launch its new corporate plan, “Dynamique 2025,” succeeding “Excellence 2020.” One of our key ambitions is to position BGFIBank as a reference institution in Africa for financing large-scale, structuring investments.

We will increase long-term lending and expand the use of innovative financing tools, including participatory financing, to better meet Africa’s infrastructure needs.

How has the Covid-19 crisis affected infrastructure projects?

The Covid-19 pandemic has had a profound and multifaceted impact on infrastructure projects across Africa, causing delays, suspensions, cost overruns and funding constraints.

As public resources have come under pressure, traditional state-led financing models are increasingly insufficient. This situation calls for alternative and innovative financing solutions, including public-private partnerships, infrastructure bonds and greater involvement from commercial banks.

Despite the challenges, the crisis has also highlighted opportunities—particularly in digital infrastructure, healthcare and telecommunications—which are expected to attract increased investment going forward.

Is the energy transition taken into account?

Energy remains Africa’s greatest infrastructure challenge, accounting for around 40% of total infrastructure spending needs, while less than 50% of the population has access to electricity.

Fortunately, Africa has vast renewable energy potential. As a result, energy transition projects are increasingly integrated into infrastructure strategies, helping address climate change, energy access and post-Covid economic recovery.

At BGFIBank, we are already adapting our financing policies to support the energy transition, which will be a key focus of our upcoming strategic plan.

Your view on the future of infrastructure financing in Africa?

Infrastructure investment will remain a cornerstone of Africa’s growth. However, quality, sustainability and alignment with long-term development strategies are essential.

Greater private-sector participation is indispensable. This requires improved regulatory frameworks, stronger public-private dialogue and the emergence of robust local private sectors.

Interview conducted by L.B.
Source: Revue Banque