Public-Private Partnerships

Public-Private Partnerships (PPPs) are increasingly seen in Africa as an essential institutional mechanism to design, build, finance and/or operate infrastructure facilities hitherto provided by the public sector.

It is still rare to find African governments stimulating private sector involvement within the context of an overall procurement policy for infrastructure, so that privatisation, concessions, output-based performance contracts and other forms of public-private partnerships can be assessed alongside public provision as potential options.

Set against the level of potential investment demand and the impressive growth rates in a number of African countries recently, one conclusion is that low demand for infrastructure is unlikely to be the reason for relatively low levels of private investment in Africa when compared to other developing regions of the world. Equally, if the growth of some sectors across the continent is a guide, the ability and willingness in a number of sectors for citizens to pay for better quality infrastructure may not be a constraint.  The work that is required is on the supply-side of private investment, including the obstacles to mobilising private-sector resources.

Increased private sector participation in African infrastructure will require governments and donors who support them to think and behave in new ways.  In many countries in sub-Saharan Africa where public sector processes and institutional capacity is weak, the implications for managing the relatively complex PPP process should not be under-estimated.  Important pre-requisites for a successful PPP programme include a clear policy framework, a legal system that ensures contracts are effective and enforceable, a long-term investment plan, and an operating framework within government to properly manage the PPP process.  All of this needs strong political commitment over the long-term.

ICA has prepared a guide, Attracting Investors to African Public-Private Partnerships, to help the public sector in Africa to attract private sector investment through effective project advertising, management, and implementation.  This book will enhance the chances of developing effective public-private partnerships by overcoming major obstacles to project delivery by having the right information, on the right projects, for the right partners, at the right time.

Download guide: "Attracting Investors to African Public-Private Partnerships"

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