Building a New Africa
infrastructure continues to hinder the
continent’s great economic promise. And
it’s clear the Sub-Saharan nations can’t
do it on their own—
paving the way for
new alliances with
the private sector.
improve the dire
traffic jams in its
commerce capital of
Lagos, Nigeria joined
forces with local
Bank. The resulting
$400 million project to rehabilitate and widen
the city’s expressway marks the country’s first
public-private partnership (PPP).
And in South Africa, which has implemented
many successful PPPs over the past decade, the
Gauteng provincial government teamed up with
Bombela, a Canadian-French consortium, for an
80-kilometer (50-mile) rapid-rail link to connect
Johannesburg, Pretoria and Johannesburg’s OR
Tambo International Airport. The nearly $4 billion
project, which began construction in 2006, was
slated to debut in July.
The simple truth is that without adequate
roads, telecommunications lines and other primary infrastructure, the Sub-Saharan region
can’t build its industrial base and lure future
Yet most African nations lack the financial
resources and expertise to close this yawning
gap. Even after spending nearly 12 percent of
its collective GDP on infrastructure, the continent requires nearly $93.3 billion more to meet
current needs, Sanusi Lamido Sanusi, governor
of the Central Bank of Nigeria, reported at
the West Africa Global Trade and Investment
Forum in June.
Enter the private sector—always on the prowl
to stake a claim in new markets.
Gautrain Rapid Rail Link, South Africa
BRINGING IN EXPERTISE—AND MONEY
PPPs create new avenues for financing while
providing governments with much-needed
project management knowledge. The influx of
private-sector money and expertise drives more
cost-efficient projects, reduces risks and fosters
best practices while developing the skill sets of
the local population.
That added project management capability
is particularly valuable on large cross-border
projects that face increased structural and regulatory complexities, says Adama Deen, head
of infrastructure programs and projects at the
Johannesburg, South Africa-based New Partnership for Africa’s Development’s Planning
and Coordinating Agency.
“PPPs give these countries the capacity they
need to manage and implement cross-border
infrastructure projects,” he says. “It is the way
forward for Africa.”
The Kenyan government, for example, is
looking to finance as much as 80 percent of its
infrastructure projects through PPPs by 2030.
Nigeria estimates it will need between $12 billion to $15 billion annually for the next six years
to meet its infrastructure demands. To reach
those numbers, the Urban Development Bank
of Nigeria plc (UDBN) and the Development