Strong foundation for Africa

Building a strong foundation for Africa 

Nowhere is infrastructure resilience more important than in Africa. As the continent once considered ‘dark’ emerges into a brilliant new era of growth and stability, much of its success will depend on the quality and resilience of infrastructure. Investors will demand efficiency; a growing middle class will demand quality and both will increasingly expect that – when they flick a switch – the lights will come on and stay on.

“Never before has Africa’s massive wealth and potential been so evident; this is truly an age of ascendency for Africa’s economies and people,” noted Lord Michael Hastings, KPMG’s Global Head of Corporate Citizenship. “But if we want to make the kind of human progress that will be necessary to end the continuous cycle of poverty and desperation that – to this point – has largely characterized Africa’s story, we need to make sure that infrastructure is resilient, well-planned and up to international standards.”

Hardening infrastructure and systems

Africa’s business leaders recognize the importance of resilience in infrastructure. According to a recent KPMG survey1 of business leaders across 18 African countries, disruption to critical infrastructure ranked as the second highest risk facing Africa’s organizations (just slightly behind disruption to IT systems and data which – one could argue – is almost entirely dependent on the ongoing resilience of critical infrastructure such as power and ICT networks).

Not surprisingly, the risk that concerned respondents the most after IT and infrastructure disruption was the risk of fraud and corruption, an issue that also has a direct impact on infrastructure resilience. “Time and again, we see infrastructure being put up cheaply in Africa because money has been siphoned off to pay bribes or line suppliers’ pockets,” added Lord Hastings. “The only way that this issue can be addressed is by embedding governance models that ensure transparency between governments, businesses and industry so that the investment resources that are applied actually stay as investment resources.”

Delivering to a high standard

Africa’s fast economic growth has highlighted the need to pay more attention to risk management and ultimately to business continuity management (BCM) as a corporate discipline, to achieve organizational resilience, protect shareholder value and prevent financial loss and reputational damages.

A major challenge for Africa’s businesses in general (and infrastructure operators in particular) is the fact that business continuity is not yet embedded in most organizations’ culture. Two thirds of the respondents say they have a business continuity program in place (65 percent), but more than half either have not implemented the majority of BCM components or have not reviewed them in the last three years. These organizations will most likely not be able to respond to an operational disruption successfully.

“There has been a tendency for people – both on the continent and off – to assume that Africa’s population can survive on dodgy infrastructure and an inadequate supply of services, but that’s simply not the case,” said Lord Hastings. “Private companies, development organizations and infrastructure developers need to rise to a higher standard both in the construction and operation of critical infrastructure.”

A new mindset

According to Lord Hastings, who has spent much of the past few years visiting projects and talking with government leaders across Africa, one of the most frequent causes for infrastructure disruption in Africa comes from a failure to consider all of the interdependencies required within a modern infrastructure system.

Lord Hastings tells a story of a trip he took to Senegal to visit an irrigation project that had been funded by EU countries to help local farmers create an export market. Recognizing that there was now a secure source of water in the area, the government (with some development partner support) built a brand new school adjacent to the site. But what they didn’t do was put proper ventilation into the school or a way to power it, so ultimately the new social infrastructure asset was a failure.

The same applies to most modern businesses whose success depends heavily on the resilience of critical infrastructure such as power, telecommunications and transport. And while in the past businesses accepted service failure naturally, this will not likely be the case in the future as modern businesses demand immediate response, and downtime represents heavy financial losses and reputational damages.

“There is a clear opportunity for the donor community and national governments to really start thinking about how their investments can be used to inspire the embedding of international standards and best practices around building designs, environmental designs, business continuity planning and resilience planning,” added Lord Hastings. “All parties – public, private and donors – need to start seeing infrastructure as an investment in the growth potential of an economy rather than simply the delivery of a building or facility; and that’s a different mindset altogether.”

Positive signs emerging

The survey does suggest, however, that African business leaders have recently started to take the need for greater resilience more seriously. Business continuity programs are increasingly sponsored by the Board of Directors and the majority of respondents (80 percent) said they have an IT Disaster Recovery Strategy and an IT Disaster Recovery Plan.

Other BCM components are not so well understood, perhaps due to the fact that international BCM standards are not yet followed by 61 percent of respondents. Many companies do not perform business impact analysis to determine critical business processes and adequate business recovery strategies (40 percent). Crisis management, business recovery plans, BCM training and awareness, and BCM performance evaluation are not yet common practices in Africa (less than 50 percent).

“I see some positive signs, both in the data and in my travels across the continent, that governments, aid organizations and the private sector are starting to put additional focus on ensuring the resilience of their infrastructure assets, but more must still be done,” added Lord Hastings. “And in my opinion, there has never been a more critical time for Africa and its supporters to get this right.”

[1] Business Continuity Management in Africa: Building resilience in a volatile environment; 2013

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