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In the aftermath of the global financial crisis, policy makers focused on improving access to finance, missing the crux of the problem: governance.
In pursuit of achieving the Sustainable Development Goals through the 2015 Addis Ababa Action Agenda on financing for development, the Regional Roundtables on Infrastructure Governance* were created to promote a community of practice comprising government officials and the international development community to strengthen capacities within developing countries and establish good practices in infrastructure governance across various government sectors.
The inaugural roundtable, hosted by the Development Bank of Southern Africa, will take place in Cape Town on November 2-3, 2017, and aims to emphasize that for the commercial financing of infrastructure to be a viable option, governance reforms must happen.
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"The nation has a huge infrastructure deficit for which we require foreign capital and expertise to supplement whatever resources we can marshal at home. In essence, increased engagement with the outside world is called for as we seek public-private partnerships in our quest for enhanced capital and expertise. This is the way of the new world for all countries in the 21st century." – HE President Muhammadu Buhari
Within the first 100 days of his administration, President Muhammadu Buhari signaled his administration’s commitment to attracting the private capital and expertise needed to address Nigeria’s infrastructure deficit. This led to a renewed engagement between the World Bank Group and Nigeria to enhance the attractiveness of the Public-Private Partnership (PPP) ecosystem in the country.
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The theme of this year’s Global Infrastructure Forum was delivering sustainable and inclusive infrastructure. As a woman who works in the world of infrastructure, I was invited to join a panel at the forum made up solely of women to address gender inclusivity and was asked to provide a specific example of a project beneficial to women. The first thing that came to mind was our solar project in Senegal, which has not only opened up the country to solar for the first time, but has also empowered local women through training in business skills through an organization called Empow’Her that was linked to the project.
“If there is one thing that could really help my business, it would be reliable power supply,” said David, a small business owner in Lagos, on my recent trip to Nigeria.
“I agree. If only …,” echoed another.
And not without reason.
, the region with the second-lowest access rate. If we were to measure access to “reliable” electricity, then those numbers would be even more dismal.
Worryingly, the rate of access has been increasing at a mere 5 percentage points every decade, against population growth of 29 percent. If something is not done to dramatically change this trend, Africa will not see universal access to electricity in the 21st century. This is a seriously worrying prospect as the world races toward a 2030 deadline of universal access to electricity.
The target of achieving universal access by 2030 by the U.N.’s Sustainable Energy for All initiative and the billions of dollars committed by the U.S. government’s Power Africa plan underline the urgency of the situation. As a reminder,
So, are Africa’s utilities financially equipped to respond to this call?
The 2016 World Development Report: Digital Dividends, the World Bank’s flagship report launched on 14 January 2016, presents a policy framework to assist governments in making the best use of information and communication technologies (ICTs) for development. Specifically, the policy framework, presented on the page 206 of the report, shows how policy interventions in the areas of market competition, public private partnership and effective regulation can help in addressing the digital divide and enhancing connectivity. The policy framework is structured around actions in the first mile, middle mile and last mile of the network as well as in the intangible parts, labelled the “invisible mile” (see “How networks are built”).
The PPI Database’s 2014 full year update for these sectors has just been released, and it confirms the trends we began tracking for the first six months. Total investment in infrastructure commitments for projects with private participation in the energy, transport, and water and sanitation sectors increased six percent to $107.5 billion in 2014 from levels in the previous year. The total for 2014 is 91 percent of the five-year average for the period 2009-13, which is the fourth-highest level of investment commitment recorded – exceeded only by levels seen from 2010 through 2012.
This increase over 2013 was driven largely by activity in Brazil. Without Brazil, total investment commitments would have fallen by 18 percent, from $77.2 billion in 2013 to $63.4 billion in 2014. Although this is lower than H1 2014 (57%), Brazil’s large stake is a continuation of a recent trend.
The Latin America and the Caribbean (LAC) region saw $69 billion of investment commitments, or nearly 70 percent of the total for 2014. Three of the top five countries by investment commitments in 2014 were from LAC. The top five, in order, were Brazil, Turkey, Peru, Colombia, and India.
- Public Private Partnerships
- private participation
- private participation in infrastructure
- ppi database
- infrastructure investment
- infrastructure financing gap
- infrastructure financing
- Africa's infrastructure
- partenariats public-privé
- public-private partnership
- public-private partnerships
- Public Sector and Governance
- Private Sector Development
- South Asia
- Middle East and North Africa
- Latin America & Caribbean
- Europe and Central Asia
- East Asia and Pacific
Why is Senegal’s Dakar-Diamniadio toll road, which opened on time and on budget in August 2013, so successful? The road has dramatically improved urban mobility around Dakar, reducing commute times between the city and its suburbs from two hours to less than 30 minutes.
Building on this positive experience, in 2014 the Government of Senegal awarded a further concession to extend the motorway to connect it to Dakar’s new Blaise Diagne International Airport. Excluding South Africa, this is the first greenfield road PPP in sub-Saharan Africa. What lessons can we draw?
- Political commitment. The Government of Senegal set the project as a priority. The first driver on the road was the President – who paid the toll. But commitment alone isn’t enough; it needs to be turned into action by government agencies. An intra-agency coordinating committee was set up. The National Agency for the Promotion of Investments (APIX) oversaw the preparation of the concession. The Public Private Infrastructure Advisory Facility (PPIAF) supported APIX with technical assistance, including the design of a framework for the oversight of the project.
- Consensus-building and stakeholder engagement. Part of PPIAF’s US$250,000 grant to the Government of Senegal helped to pay for seminars with stakeholder groups to discuss structuring options for the road and socio-economic drivers of the willingness to pay. The final structure chosen involved a relatively low toll, with an upfront contribution by the government to the cost, with the concessionaire taking full construction, operating and traffic risk. The combination of careful outreach to stakeholders, a fairly low toll, significant time savings and a well-maintained road meant that the first toll road in the country was accepted by the population. In addition, the fact that there is a free alternative road helped the Government and other stakeholders point out that motorists could always choose to use the other route.
- Experienced concessionaire with strong commitment to Senegal. The concessionaire, the Eiffage Group is one of Europe’s leading construction and toll road operating companies, with a long history of involvement in, and commitment to, Senegal. Eiffage, through the special purpose company set up to construct and operate for 30 years the road, SENAC S.A., ensured that the road was constructed and is being operated to a high standard, on time and within budget.
The results suggest strangely mixed conclusions. In certain ways, poverty trends in Nigeria over the past decade were better than has been widely reported, where a story of increasing poverty has been the consensus. And yet poverty is stubbornly high, disappointingly so given growth rates.
Three facts stand out.
Africa's Infrastructure: A Time for Transformation
Yesterday in New York I attended a discussion on infrastructure in Africa. As co-author of the Africa Infrastructure Country Diagnostic, I've been talking with people for years about the importance of reliable infrastructure for economic and social activity in Africa. Today we're talking about how infrastructure can help achieve the Millennium Development Goals (MDGs).
The core of the MDGs is poverty reduction and improved human development, but how can those goals be met without basic infrastructure to create economic opportunities and support public service delivery? This is a critical question when you think about the facts that 30 Sub-Saharan countries have a power supply crisis, their road freight moves as fast as a horse-drawn cart, and less than 5 percent of agricultural land is irrigated. Although Africa’s infrastructure needs may look daunting, countries like China have shown that it is possible to deliver on the requisite scale.