Public-Private Partnerships

Public-Private Partnerships (PPPs) have emerged over the last decade as one of the best ways to foster development, fuelled by insufficient investment, growing pressures on government budgets and a general concern about service provision by state enterprises and agencies.

PPPs have taken place mainly in economic (physical) infrastructure, such as power, transport, telecommunications, and water and sanitation. The desire of greater efficiency and better services, as well as the limited volume of public resources available to finance such services are now increasingly leading governments to enhance public-private partnerships approach.

In order for more PPPs to emerge in Africa, countries need to improve the business environment. At present serious constraints exist in many countries. These constraints are: inadequate legal and regulatory framework for PPPs; lack of technical skills to manage PPP programmes and projects; unfavorable investor perception of country risk, Africa’s limited role in global trade and investment, small market size, limited infrastructure and limited financial markets.

The African Development Bank is encouraging African countries to create the necessary legal and regulatory framework for PPPs; as well as facilitating networking and sharing of experience among regulatory agencies and other similar organizations.

The Private Sector Operations Department is a key player as lender and advisor to Regional Member Countries (RMCs) in supporting PPPs in across our areas of focus including basic Infrastructure such as transportation, energy generation that are essential for Africa’s economic development but also in Industries and Services in projects in agribusiness in support to food security on the continent. Our team collaborates with the Bank’s Country and Regional Departments to identify areas of policy dialogue and interventions to support Governments of RMCs to facilitate PPPs. We are also fostering and building strong development partnerships with multilateral, regional and national development banks, private sector financial institutions and other key players to support infrastructure development and PPPs on the continent.

Did you know

In 2016, total Bank approvals for private sector operations amounted to UA 1.93 billion, 24 percent higher than in 2015. The interventions in 2016 — co-financing, syndication, and strategic partnerships—have strengthened its capacity to leverage and crowd-in third-party investors. They also lifted the ratio of private co-financing to Bank financing to 6:1, against the target of 5:1.