Governments urged o boost private sector alliances

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Windhoek - The slow pace at which African governments are facilitating public-private partnerships (PPPs) is hampering development across the continent, African Development Bank statistics show.

Data from the AfDB indicates that just five African countries accounted for more than 50 percent of all successful PPP activity from 2008 to 2018. These are South Africa, Morocco, Nigeria, Egypt and Ghana.

Several other countries have potentially lucrative PPPs in the pipeline, notably Burkina Faso with 20 and Botswana has eight.

The AfDB estimates Africa’s infrastructure financing needs at up to US$170 billion a year by 2025, with an estimated annual financing gap of between US$68 billion and US$108 billion.

In an effort to increase PPPs in Africa, representatives of the AfDB, governments, development finance institutions, the private sector and professional associations held a workshop on September 8 workshop to discuss how to improve PPP activity.

The virtual engagement was themed “Designing the African Development Bank’s PPP Framework”.

AfDB vice-president Solomon Quaynor said before the COVID-19 pandemic, the continent was already struggling to structure projects tailored for private sector participation in economic development.

“It is, therefore, imperative that hybrid solutions such as PPPs must be promoted as a way of building back better, stronger, greener, by clawing back private capital to infrastructure while creating much needed fiscal room for governments to address multiple other demands including building health systems’ resiliency,” he said.

Participants expressed a desire for the bank to play an expanded role in supporting PPP development in Africa by strengthening policy and regulatory frameworks; building government capacity; project structuring and advisory services; and provision of financing instruments.

“Countries need to learn from each other’s achievements and mistakes. They need to have standard documents and checklists that will guide institutions in these countries through the PPP lifecycle,” said Shoubhik Ganguly of Rebel Group International, which is partnering the AfDB to develop co-operative frameworks.

The bank’s infrastructure partnerships division manager, Mike Salawou, said: “Policy dialogue is something the bank places a lot of premium on, and that has proven to be very efficient in informing decision making.” 

Private sector representatives pointed out that foreign direct investment was indispensable in securing financing for PPP projects in Africa.

An example of a successful PPP undertaking cited during the workshop was the Kigali Bulk Water project, which had significant backing from the AfDB, the World Bank and private sector partners.

 

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