Let partnership gains not elude Africa

Wednesday April 3 2019

 

By Julius Kapwepwe

Global implementation of Sustainable Development Goals (SGDs) commenced from 2016 and is expected to become a reality by 2030. This for Africa must be in areas like SDGs 1 - Against Poverty; 3-on Good health; 8 - on Inclusive and sustainable economic growth. Others include 9 - on Resilient infrastructure and inclusive sustainable industrialisation; 13- on climate action; and 17 on Global partnerships for sustainable development.

At the heart of all these actions lies development policy coherence and sustainable financing. So where is the place of the financing under Public- Private Partnerships (PPPs) - even with about seven types of PPPs? Arguably, private sector’s place in the public domain leverages greater value for money, managerial, technological and efficiency superiority over governments in delivering public goods and services.

I am, albeit, skewed that PPPs only make modest contribution in public sector, for which we must rely more on government for implementation of public sector investments, SDGs and regulation.

So, from Economic Forum (Davos), to CEO Forum (in Kigali, March 2019), IMF-World Bank (Annual and Spring meetings), the on-going 30th Arab League Summit (in Tunisia) or even Summits by leaders under East African Community (EAC), development actors must present parameters that are litmus to “good PPPs” and “bad PPPs”.

With slow global economic growth, Americas, Europe and Asia are looking to Africa to grow their own economies and unlock sections of their dormant capital. By end of 2019, advanced economies of the world are expected to register 2.1 per cent economic growth, with the Euro zone at 1.9 per cent (see November 2018 IMF growth projections). This state of affairs could be worsened or even stagnated by continued escalation of neighbourhood (eg Uganda- Rwanda) regional (EAC) and global trade tensions.

Yet beyond trade tensions, poor infrastructure across key social and economic sectors undercuts Africa’s development, where about 3 per cent of GDP is lost annually. This is bad economics not only for emerging and developing economies, but also global economy. With obtaining inadequate infrastructure; sub- Saharan Africa is projected to grow at 3.8 per cent (nearly 4 per cent) in 2019. Africa is the world’s fastest growing economy with higher returns on investment, including PPPs.

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Africa already has more than 335 PPPs worth $ 59b towards bridging the infrastructural gap, including 85 in South Africa; 35 in Nigeria; 22 in Kenya; 22 in Uganda (majorly in transport and energy sectors). Even so, Africa must raise the bar, for quality of good PPPs to have the following character:
General cost-benefit analysis to recipient country: Evidence for job creation, lowering cost of a country’s doing business, leveraging inclusive growth frontiers. Demonstrate import substitution or even inter- intra trade and economic links with regional and global level. Transparency and local content richness: Let PPPs be open to public scrutiny rather than simply “foreign-designed”.

Away from the controversy around Uganda Airlines, in March 2019, there should be clarity on investment shareholding and tax obligations to avoid “base erosion & profit shifting” and profit sharing obligations with the host Government.

Others are project debt portfolio pertaining to principle and amortisation overall computation, given that infrastructural financing has contributed to Africa’s growing debt. Extent of respect for human rights, dignity and standards, especially for women and children. Compliance with a country’s regimes - legal, policy and institutional.

A PPP intervention should improve efficiency of public service outlays and higher economic development returns. Let not gains of PPPs elude some Africa economies.
Julius Kapwepwe,
Jkapwepwe@udn.or.ug

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