AfDB challenges private sector to invest in Infrastructure in Africa
The bank’s Interim Vice-President, Operations North, East and South, Mrs. Zainab El Bakri, said the low level of private sector participation in investments in the projects had been a source of worry to the bank and to NEPAD.
In an address of welcome, which she presented at a seminar on "Fostering private investments in NEPAD infrastructure projects,’’ she said while NEPAD had included capacity building and facilitation programmes to enhance all aspects of infrastructure development, "results achieved in terms of private involvement in infrastructure indicate that there is room for improvement’’.
She recalled that in May 2002, the NEPAD Heads of State and Government Implementation Committee adopted the Infrastructure Short Term Action Plan (STAP) and agreed that the Medium and Long Term Strategic Framework should be developed subsequently.
"Of the STAP 36 physical projects, estimated to involve investments of about seven billion dollars, half were expected to involve private financing," she said.
El Bakri lamented that nearly three years after the launch of STAP, it was clear that private sector engagement in financing of NEPAD infrastructure projects, which were largely multi-country infrastructure projects, had not been forthcoming.
"Out of the 12 physical projects linked to NEPAD for which the ADB has approved financial support for the past three years, only one involved the private sector,’’ she stressed.
She observed that in contrast to the lukewarm interest of the private sector in African infrastructure programmes, the sector had been the active participant in the provision of infrastructure in other developing regions of the world.
"The result had been significant, not only in terms of financing, but also in technology transfer and efficiency gains,’’ she said.
El Bakri said in order to encourage private sector partnership in the provision of infrastructure, the ADB was supporting activities to improve the financial as well as legal and regulatory infrastructure in a number of African countries.
She said the seminar, jointly organized by the bank, NEPAD and the African Business Roundtable aimed at providing information on potential private financed projects in the STAP, promote understanding of the global trends and issues in attracting private investments in infrastructure, especially in Africa and discuss private sector actions to promote and implement NEPAD infrastructure project.
The seminar also aimed at discussing steps African countries could take to champion public-private partnerships in infrastructure development and discuss the role of multilateral development banks and international financial institutions in supporting NEPAD’s goal of increasing private investment in infrastructure.
In his own remarks, Alhaji Bamanga Tukur, Chairman, African Business Roundtable and NEPAD Business Group said Africa’s infrastructure strategic plan needed to dovetail and complement the region’s urban and rural development strategies to secure the economies of scale, market linkages and potential for key clusters and sectors to draw the economies of the region.
"We need studies that will look at the key sectors and cluster quotients, employment generators, unused and installed capacities, natural endowments, market volumes and profiles,’’ he said.
"Demand-led investment in infrastructure always will appeal to the private sector, especially where the sums add up,’’ he said, stressing: "Business has no boundary, it goes where it adds value.
In his own contribution, Chairman, NEPAD Secretariat, Professor Wiseman Nkuhlu, said NEPAD believed that through better partnerships, more could be done in the area of infrastructural development on the African continent.
He expressed regret that the private sector and African governments were not paying adequate attention to the financing of infrastructure projects.
Professor Nkuhlu noted that while the ADB had played significant role in projects financing, it did not do so to compete with any other financial institutions, but merely to provide the seed money to fast-track investments in infrastructure on the continent.