North Africa to boost public-private partnerships to support economic development

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"Diversifying the sources of funding for public infrastructure projects means seeking innovative approaches that integrate public-private partnerships in particular,"  the Tunisian Prime Minister, Ms Najla Bouden, told participants of a seminar titled Public-Private Partnerships in North Africa for sustainable and inclusive growth that was held on 15-16 June in Tunis.  

The event, organized by the Instance générale tunisienne de partenariat public-privé (IGPPP), the Caisse des dépôts et consignations tunisienne and the African Development Bank Group, provided an opportunity to take stock of public-private partnerships (PPPs) in Africa, study challenges and constraints associated with using them and highlight success stories.

"North Africa has immense potential in terms of infrastructure development, which is essential for sustainable economic growth," said Mohamed El Azizi, African Development Bank Managing Director for North Africa.

"Given the investment and maintenance needs of infrastructure, PPPs offer a suitable approach to meeting the challenges facing African countries. However, we must recognize that PPPs are not without their shortcomings and pitfalls. Higher costs, complex contractual processes and potential monopolies are just some of the challenges we need to address diligently," he warned.

For PPPs to be effective, there must be strong political will, a transparent, accountable and fairly competitive environment, but also sound regulatory frameworks, clear procurement procedures and effective contract management, El Azizi stressed.

The event featured a roundtable discussion of the challenges and constraints of PPPs. Among the high-level panelists was Mr. Ziad-Alexandre Hayek, chairman of the World Association of PPP Professional Units. He said: "African countries have generally reached high levels of indebtedness and need to attract private investment to finance their infrastructure projects. The costs of preparing these projects, which are by definition complex, are high. Political leaders see PPPs as procurement rather than development instruments, while African financial markets are not sufficiently developed to meet financing needs. We therefore need to move to an integrated approach to de-risking PPP projects politically, financially and operationally."

Eyup Vural Aydin, President of the Istanbul Public-Private Partnership Center of Excellence, pointed out  that Turkey is a pioneer in the use of public-private partnerships. Since the 1980s, the country has been in the forefront of OECD countries using PPPs to finance major infrastructure projects in the transport, energy and tourism sectors. Examples from the past ten years include the new Istanbul airport, the Yavuz Sultan Selim bridge (the third bridge in Istanbul), the Eurasia tunnel, the Osmangazi bridge, the Yozgat and Mersin hospitals and the Istanbul-Ankara high-speed train line.

The mobilization of private-sector resources through PPPs to finance sustainable and inclusive infrastructure is thus one solution to the reduced fiscal room for maneuver that many African countries are facing owing to difficult economic conditions globally and high levels of public debt.

Despite a legal framework and agencies dedicated to PPPs in Tunisia, Morocco, Egypt and Mauritania - with Libya and Algeria also putting these in place - building up a portfolio of bankable PPP infrastructure projects has been slow, despite the existence of a critical mass of projects.

In a speech broadcast via video, Ms Bouden called for "redoubled efforts to mobilize financing in order to build a high-performance infrastructure network that serves cities and economic areas. The trajectory of development is closely linked to the modernization of these infrastructures to catalyze investment and consolidate institutions in order to create jobs and improve people's quality of life."

The Support Fund for Public-Private Partnerships in Tunisia has been launched, and the capacities of IGPPP Tunisia have been strengthened, added Prime Minister Bouden.

Several delegations presented to the audience a number of bankable PPP projects. The Tunisian Minister of Economy and Planning, Mr. Samir Saïed, thus indicated that the State had identified as potential PPPs the projects of the Sfax metro, the Gargour-Sfax logistics zone, the agricultural production platform of Sidi Bouzid, the headquarters of several ministries, the Zaghouan cable car, the hydro-mechanical transport of phosphate and the marina of Sidi Bou-Saïd.

Saïed also mentioned the need to ensure “investments with triple profitability: financial and economic profitability, social profitability—social justice and development should be the main objective of economic development—and environmental profitability at a time where the planet is burning.” Projects such as desalination of seawater, production of photovoltaic electricity, reuse of wastewater fall within this framework, he said.

The African Development is working towards the establishment of a multidonor Africa PPP Development Fund to enable the creation of well-prepared and bankable projects.

In view of the seminar’s success as a platform for exchanging ideas and strengthening cooperation in North Africa, Mr. El Azizi announced that the Bank would be "working to make it an annual forum."

Mr. Atef Majdoub, President of IGPPP Tunisia, welcomed the announcement. "We will have a seminar every year, with the organization rotating to each of the six countries in the region for the purposes of sharing experience and transferring know-how,” he said.

The seminar brought together all the bodies in charge of PPPs in the six countries of the region, as well as promoters, banks, representatives of various administrations and financial backers.

source: AFDB

Click here to download the photo album of the seminar

Click here to download the photo album of the seminar




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