Public-Private Partnerships (PPPs) are increasingly seen in Africa as an essential mechanism to design, build, finance and/or operate infrastructure facilities hitherto provided by the public sector.
Constraints on public sector resources, growing pressure on government budgets across Africa and concerns about the efficiency of service provision by state enterprises and agencies have led to many governments stepping-up their efforts to encourage partnerships with the private sector.
From the perspective of the private sector, PPPs are becoming increasingly viewed as an effective way to mitigate some of the risks associated with privately-financed and managed projects in Africa. By involving public sector partners, some of the bottlenecks leading to delays and difficulties can be unblocked.
The ICA’s flagship annual report, Infrastructure Financing Trends in Africa gauges the views of the private sector towards investing in Africa’s infrastructure development, including involvement in Public-Private Partnerships. The ICA’s engagement with the private sector indicates that a lack of political will and certainty was the number one barrier to the implementation of PPPs. A lack of institutional capacity and unrealistic expectations also feature high on the private sector’s lists of concerns, together with financial risk, the regulatory environment and potential corruption or a lack of transparency. However, obtaining finance does not appear to be a major concern, which appears to indicate an increase in the availability of finance for infrastructure projects.
The ICA has also launched an initiative with the United Nations Economic Commission for Africa (ECA) to identify and address the key challenges associated with PPPs in Africa’s electricity sector, setting up an Expert Working Group that will proactively identify issues of policy relevance and explore future research and capacity needs in this area.
The ICA is also working to enhance private sector engagement in regional power projects. It is currently updating its 2011 report on Regional Power Pools and organised a forum in Dakar, Senegal, in March 2016 that focussed on how best to engage the private sector in Africa’s power sector development and the role of Regional Power Pools in fostering enhanced private sector engagement in regional power projects. This will be followed-up by ICA-organised training workshops for the power pools and power utilities.