Updated: Jun 29, 2022
New and more effective public-private partnerships (PPPs) are urgently required to meet the critical infrastructure needs of a global economy. Around the world, new investments in electricity (green and other), roadways, railways, port facilities and water supplies are falling short of the demands of a growing population and an increasingly interconnected and interdependent global economy. While in the developed world, governments often have the financial capacity and experience in either providing such infrastructure directly, or through closely regulated private companies, such is not the case for much of the developing world, and in Africa in particular. In fact, the African Development Bank (“AFDB”) estimates that African countries need to invest 130-170 billion USD by 2025 to meet their present and future infrastructure needs.
In addition to simply lacking the financial capacity to make the investments to foster economic development, many developing economies are also hindered by decades of insufficient maintenance, under-collection of revenues and overstaffing.
Yesterday, leaders of the wealthiest democracies meeting in Germany’s Bavarian Alps for the G7 Summit announced a 600 billion USD lending initiative to fund infrastructure projects in the developing world, which they say will have a particular focus on Africa.
The leaders of the G7 – which comprises Canada, France, Germany, Italy, Japan, the US and the UK – say that the Partnership for Global Infrastructure Initiative (PGGI) will help to close the infrastructure gap in developing countries and will provide an alternative to China’s Belt and Road Initiative (BRI), an infrastructure and investment programme spanning multiple continents.
The important role of PPPs is the collaboration with local governments, providing not just needed capital, but also training and expertise to increase the efficiency of these infrastructure assets in developing countries. But, according to the African Development Bank, such partnerships have been slow to develop, despite the clear opportunities for gain for both parties. This question was examined in a panel on “The Future of Public-Private Partnerships” I participated in during the recent Qatar Economic Conference in Doha on June 21st 2022, where I was invited by Bloomberg Media, co-sponsor of the event.
The panel, moderated by Ruth David, Deputy Head of Bloomberg's London Office, explored how governments and industry can leverage lessons learned to improve public-private partnerships. The real need to integrate the SDG dimension (Sustainable Development Goals) in order to measure the social impact and ESG (environment/social and governance) performance of PPP projects, was highlighted. In addition, the need to maintain the economic balance among all stakeholders, including civil society was strongly emphasized.
June 29, 2022
By Lena Sene
Presdient and CEO of DCA Africa