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The Role of Public-Private Partnerships in Economic Recovery in Africa

  Oct 16, 2020
  General,

Governments in Africa are looking to Public-Private Partnerships (PPPs) to rapidly improve infrastructure and service delivery. Over the past decade, PPPs have taken shape in Africa, albeit slowly, as more governments adopt them as a means of financing large infrastructure projects. Big development projects often involve the public sector arranging for and providing finance. These financing needs are covered through revenues or borrowing.

The Organisation of Economic Development (OECD) defines Public-Private Partnerships as a development financing model where the government shares risks and responsibilities with private firms but ultimately remains in control of the assets.

Public-Private Partnerships are crucial to the economic recovery of our continent. Given the impact of COVID-19, it is evident that the private sector is not only a key stakeholder in development but also an indispensable anchor. In the face of the covid-19 pandemic, we have seen the private and public sectors work more closely together. This increased collaboration has created a foundation for public and private sector collaboration which must continue in the journey to economic recovery post-pandemic.

By shifting the responsibility of financing from the public sector only, PPPs can enable increased investment in infrastructure and increased access to infrastructure services. What is needed now is increased financial support for growth sustaining infrastructure.

Speaking during the third session of the CEO Dialogue Roundtable, Dr. George Njenga, Executive Dean – Strathmore University Business School, said, “Africa has a large infrastructure need and funding gap, that is where PPPs need to come in.” He further spoke about the complexities of the PPP process. “There are many complexities and risks, most of which can be minimized under certain circumstances, and through careful management of the PPP design by the sponsoring majority,” he said.

Judith Sidi Odhiambo, Head of Corporate Affairs, KCB Bank Group highlighted the need to co-create between the public and private sectors. “Continued collaboration between the private and public sectors as we have seen during the pandemic will be crucial in Africa’s recovery from this economic crisis,” she said. In terms of the “In the economic recovery of our continent, it is important that we address our local sectors and especially manufacturing, agricultural development, and infrastructure development.

Speaking during the forum, Tiekie Barnard, founder, and CEO, Shared Value Africa Initiative, highlighted three things crucial to the success of PPPs in Africa.

  1. Public-Private Partnerships can only work if there is a political willingness from the government’s side.
  2. Investor willingness to accept the risk and measure risk in terms of long term rewards.
  3. Africa is yet to harness the full capacity of PPPs.

Dr. Peter Kimbwowa, Founder CEO Summit Uganda, highlighted some of the successful PPP projects in Uganda, how they were achieved along with how they have benefited the community.

Dr. Abdu Mukhar, Director for Industrial Trade and Development, Africa Development Bank (Cote D’Ivoire)  highlighted the infrastructural financing gaps in the continent. “We estimate that between now and 2025, Africa will need between 130 billion USD to 170 billion USD .to bridge the already existent financing gap, he said. “Sub-Saharan Africa only accounts for 5% of the global PPP investments most of which is concentrated in only five countries: South Africa, Egypt, Nigeria, Morocco, and Ghana,” he added.

There are huge infrastructural development and funding gaps in Africa which can only be achieved through public and private sector collaboration. Through this increased collaboration, the continent is bound to get on its economic recovery journey post-pandemic.

 

About the Africa CEO Dialogue Forum

The Africa CEO Dialogue Forum is a series that aims at driving conversations and engaging executive and business leaders across Africa to develop insights on how to enhance growth and economic development in the continent.

The fourth session of the CEO Dialogue Forum will take place on 19th November 2020.

Learn about our Public-Private Partnerships Executive Programme.



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