Public Private Partnerships the answer to Africa’s infrastructure needs

Africa will need $40 billion annually to upgrade and maintain infrastructure necessary for economic advancement, economists at a regional infrastructure financing conference in Swaziland last week projected At the indaba hosted by the Common Market for Eastern and Southern Africa (Comesa), delegates were told by the chairman of Comesa’s regional investment agency, Chalimba Phiri, that future economic development depended on improving the region’s transportation and communications infrastructures. How such a costly transformation is to be accomplished focused on Public Private Partnerships (PPPs). “PPPs offer an alternative to government being solely responsible for development and maintenance of infrastructure,” said Phiri. Private companies can be lured into putting up money for public projects if there is a profit to be generated, such as a highway that when completed can be managed by the company as a toll road that charges road user fees. Phiri said that overseas investors should be enticed into bankrolling public works projects and not always be directed to private sector investment. “An increasing number of countries are investing in developing countries as part of their competitive business strategies,” he said. 25% of all FDI last year was channelled into developing countries, he said. “Public Private Partnerships can help government build capacity and acquire and maintain assets in environments of shrinking budgets that can make public sector investments difficult. They also allow private companies to gain new business opportunities, share risks with their public partners and enhance the social and economic environment in which they operate,” Phiri said.