KAMPALA, SEPTEMBER 16-18TH 2019.
It is my great pleasure to speak at this important conference on Public-Private Partnerships (PPPs).
Our presence here today is an indication of just how things and thinking are changing in Africa.
There is optimism in the continent’s future and new thinking on how to finance the opening up of Africa and all its regions to business, travel and trade. Our countries increasingly recognize the importance of infrastructure to their economic growth and are actively exploring solutions to fund the required development.
There is a new appreciation by our governments that infrastructure bottlenecks will restrict our growth aspirations and are therefore working to provide the infrastructure community with strong value propositions for investment.
As we seek to develop infrastructure, we acknowledge the inadequacies of the traditional mode of infrastructure financing.
To this end, I congratulate the Government of Uganda for this conference that is a clear manifestation of the new thinking to align Africa to the rest of the world with regard to financing infrastructure and related public services.
As a critical gateway to the Continent, eastern Africa needs to position itself to play a significant role in infrastructure financing and development.
We therefore need to begin thinking of innovative financial markets, strong legal system, progressive regulatory framework and ease of funding for purposes of infrastructure.
As you are all aware, strengthening regional integration is identified as a priority and one of the key new drivers of economic growth in the Africa 2063 agenda that we are all committed to.
The formation of the African Continental Free Trade Area and the new focus on intra Africa trade has created more impetus for more investment in regional infrastructure development.
With the creation of the continental free trade area, we entered a new era of infrastructure development.
The new era forces us to provide a diverse set of infrastructure assets on a grand regional scale as an immediate and urgent priority and challenge.
To achieve this goal, we must do what others cross the world have done before or are doing today; which is using Public Private Partnerships to deliver infrastructure and related public services.
Traditional public funding sources for infrastructure are falling far short of the investment needs, hence the necessity to mobilize private funds.
To succeed, we need to put and pursue all options for PPP on the table, like contracts for private-sector-run road maintenance services and Build-Operate-Transfer or BOT agreements.
To date, we lack clear PPP policy as regional bloc. We also suffer low capacity and lack of institutions responsible for driving PPPs and clear laws and customs governing PPPs especially on a regional scale.
There is also the problem of low quality and age of infrastructure, which discourage serious investors from entering PPP deals with us, alongside bureaucratic procedures and fragmented decision-making.
And we suffer from the all-time old problem of Corruption.
For PPPs to take roots and work, governments must take the lead and create necessary conditions and enabling environments.
It is the responsibility of governments to plan and prioritize individual infrastructure investments that are meant for PPPs, in line with policy targets.
This means we need to prioritize reaching broad agreements as a region on what aspects of infrastructure development to prioritize whether it is roads, energy, railways, pipelines, waterways and airports.
Success with PPPs requires that we arm ourselves with policy actions from participating governments as well as a strong high-level political backing.
High level political backing is critical. The World Bank reports that when the N4 Toll Road linking South Africa’s most industrialized, but effectively land-locked northern and eastern regions of Gauteng and Mpumalanga provinces to the Mozambican port of Maputo was completed, it was recognized as a pioneering accomplishment.
It was the first toll road concession signed in Sub-Sahara Africa. It was also the first cross-border transport PPP, and only the second regional PPP in any sector.
Most important is that the project was successful because of high-level support that came directly from the presidents of the two countries.
Our governments need to work together with the private sector and development partners to establish technical assistance facilities dedicated to the identification and preparation of projects.
As a region, we need to develop a short list of well-prepared projects ready for take up on PPP basis.
Luckily, the African Union Commission has prioritized lists of such projects under the Program for Infrastructure Development in Africa (PIDA) that aims at interconnecting, integrating and transforming the continent. PIDA projects are good candidates for PPP on regional scale.
The World Bank in its PPI report indicates that Africa is doing badly with regard to PPPs.
The World Bank’s PPI Database has recorded only seven regional infrastructure projects on the African continent since 2000. Five have been transport projects, while; two have been natural gas transmission projects. There is room for us to grow in this sector.
We must work on limiting risks for PPP projects through adequate project selection as well as fair, transparent and competitive bidding process.
Risk mitigation must also include guarantees that Governments will honor their contractual commitments throughout the project lifetime.
Working as a region instead of individual countries, it could become easy for us to tap into the assets managed globally by institutional investors, such as pension funds, insurance companies and sovereign wealth funds for infrastructure projects.
I therefore welcome this initiative by Kampala in the hope that it could be the start of an era of thinking and planning regionally for effective infrastructure development.
I thank everyone for attending and wish you very fruitful deliberations.