Following deep shortfalls in national budgets, African governments are turning to public-private partnerships (PPPs) to bridge the financing gap. Foreign investments supported by collaborative co-financing with development finance institutions offer the prospect of necessary capital to finance industries, build infrastructure, provide social amenities, and create jobs.
Narrowing Sub-Saharan Africa’s infrastructure gap could have a big effect on growth. For instance, growth of GDP per capita for the region would increase by estimated 1.7% per year, if the region
were to close the gap with the median for the rest of the developing world, according to a World Bank report in April 2017.
Closing the infrastructure gap relative to the best performers in the world could increase growth of GDP per capita by 2.6% per year. The largest potential growth benefits would come from closing the gap in electricity-generating capacity.
In the last 10 years, the continent has welcomed partnerships in such infrastructure projects, with the construction of roads, bridges, and dams being the most common. There are also partnerships in conventional and renewable energy, health, and telecommunications.
Ivory Coast, Ethiopia, Ghana, Kenya, Morocco, Nigeria, Rwanda, South Africa, Tanzania, Uganda, and others have benefitted from PPPs. Examples of PPPs in Africa include the Henri Konan Bédié Bridge in Ivory Coast, Egypt’s New Cairo wastewater treatment plant, the Lake Turkana Wind Power Project in Kenya, Senegal’s Dakar-Diamniadio Road, power and water projects in Ghana, Nigeria, and Rwanda and the Tanger-Med port project in Morocco, among others.
However, even as PPPs continue to change the face of Africa through mega projects, experts are urging African governments to be careful and learn from failed PPPs when entering into new partnerships
Through Egyptian President Abdel Fatah Al-Sisi’s introduction of Investment Law No 72 / 2017 and Article 48 of the law No 72/2017, the state has been able to liberate governmental agencies and ministries from investment obstacles. This shows that President Al-Sisi strives to play a strong and major role in Africa, and gives special interest to private investments in the continent.
Dr. Ahmed Alkalawy is a legal expert and the Managing Partner of Kalawy and Partners.
