AfDB Hails Public-Private Partnerships as Major Aid to African Water and Sanitation

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Public finance is not enough to meet Africa’s growing need for better water and sanitation, said a senior African Development Bank (AfDB)  official at a conference on the subject.  Private funding must also play its part, he said.

Mr Sering Jallow, director of the AfDB’s Water and Sanitation Department, made his remarks at a conference held in Dakar, Senegal, between 5 and 8 June.

The Infrastructure Consortium for Africa (ICA), a G8 initiative hosted by the African Development Bank (AfDB), co-organized the public-private partnership (PPP) conference with the International Finance Corporation (IFC) and other World Bank organizations.  More than 120 participants from across sub-Saharan Africa gathered to discuss ways to increase the capacity of key policy makers in accelerating access to safe and reliable water and sanitation services through targeted and well-structured PPP projects.

Participants at the conference included ministers of water and sanitation from Senegal, Uganda, Malawi, Sudan, Mauretania, Gambia and Madagascar; senior government officials in charge of water and sanitation; executives from water and sanitation utilities; financiers, and international private operators.

In his speech for the opening ceremony, the Senegalese prime minister, Abdoul Mbaye, underlined the progress that PPPs have made in his country and hailed PPPs as a response to resource mobilization without increasing Senegal's national debt. He stated that PPPs are not a panacea, but a powerful tool that guarantees better services via shared investments.

A true PPP places emphasis on ‘partnership’, as guaranteeing better services requires considerable effort and commitment from both the public and private sectors. Private sector participation provides a promising solution to sustainable management and financing of water services.

In his speech, Mr Jallow reiterated the importance of PPPs: “A number of recent studies put the annual water supply and sanitation investment, and operation and maintenance requirements at between USD18 and USD 29 billion annually. According to the best estimates, we are mobilizing only about USD 8 billion through tariffs, domestic taxes and government subventions as well as transfers from development partners. As public sector funds are insufficient to cover resource requirements, there is a need for collaboration and strong involvement of the private sector as implementers, financiers and providers of services.”

Africa is now one of the world’s fastest growing economic hotspots, with many countries averaging 6 percent growth annually. This growth creates private sector investment opportunities in Africa that include water-related infrastructure. However, in most African countries, the possibilities for attracting market-based private finance to support water utility operations are limited.

The event proved to be an opportunity to review the progress made in water and sanitation PPPs in Africa and to learn from successful African and international models. IFC hosted the conference in partnership with the Public-Private Infrastructure Advisory Facility (PPIAF), the Water and Sanitation Program (WSP), ICA, and the Senegalese Ministry of Water and Sanitation.

This event is part of a series of regular PPP capacity building and networking events sponsored by IFC Advisory Services in Public-Private Partnerships. In addition to this event, ICA partnered with IFC on a PPP port seminar held in Cairo in April 2010, and an airport seminar held in Dubai in February 2011.