Monday, June 25, 2012

PPPs (Public-Private Partnership) are Powerful Tools for African Water and Sanitation

Mr Sering Jallow, director of the African Development Bank (AfDB) said that Public finance is not enough to meet Africa’s growing need for better water and sanitation, private funding must also play its part, at a conference held in Dakar, Senegal. The Infrastructure Consortium for Africa (ICA), G8 initiative was hosted by 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.

With over 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. Ministers of water and sanitation, senior government officials in charge of water and sanitation; executives from water and sanitation utilities; financiers, and international private operators from from Senegal, Uganda, Malawi, Sudan, Mauretania, Gambia and Madagascar participated in this conference.

The Senegalese Prime Minister, Abdoul Mbaye, in his speech hailed the PPPs and the progress they have made in his country. 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.

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 one of the world’s fastest growing economies and this growth has invited private sector investment opportunities 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 Infrastructure Consortium for Africa (ICA) 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.

African Development Bank Group promotes economic and social development in Africa. It is owned and funded by member governments, and has a public-interest mandate to reduce poverty and promote sustainable development.

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