North Africa promotes public-private partnerships to support economic development | African Development Bank

“Diversifying sources of funding for public infrastructure projects means looking for innovative approaches that integrate public-private partnerships in particular,” Tunisian Prime Minister Najla Bouden told participants of a seminar entitled Public-private partnerships in North Africa for sustainable and inclusive growth which was held on June 15-16 in Tunis.

The event, organized by the Tunisian General Public-Private Partnership Agency (IGPPP), the Tunisian Deposit and Consignment Fund and the African Development Bank Group, provided an opportunity to take stock of public-private partnerships (PPPs) in Africa, study the challenges and constraints associated with their use, and highlight success stories.

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

“Given the investment and maintenance needs of infrastructure, PPPs provide an appropriate approach to address the challenges faced by 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 tackle diligently,” he warned.

For PPPs to be effective, there must be strong political will, a transparent, accountable and reasonably competitive environment, as well as solid regulatory frameworks, clear tendering procedures and effective contract management, El Azizi stressed.

The event featured a roundtable discussion on the challenges and limitations of PPPs. High-level panelists included Mr. Ziad-Alexandre Hayek, President of the World Association of PPP Professional Units. He said: “African countries are generally highly indebted and need to attract private investment to finance their infrastructure projects. The costs of preparing these projects, which are complex by definition, are high. Political leaders see PPPs as a tender rather than as development instruments, while African financial markets are not sufficiently developed to meet financing needs, we must therefore move to an integrated approach to de-risk 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 at the forefront of OECD countries using PPPs to finance major infrastructure projects in the transport, energy and tourism sectors. Examples from the past decade 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 ​​Railway.

Mobilizing private sector resources through PPPs to finance sustainable and inclusive infrastructure is thus a solution to the reduced fiscal room for maneuver many African countries face as a result of difficult global economic conditions and high government debt.

Despite a legal framework and agencies dedicated to PPPs in Tunisia, Morocco, Egypt and Mauritania – and Libya and Algeria have also set them up – building 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 finance to build a strong infrastructure network serving cities and economic areas. The development trajectory is closely linked to the modernization of these infrastructures to facilitate investment and consolidate institutions 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, Prime Minister Bouden added.

Several delegations presented a number of bankable PPP projects to the public. The Tunisian Minister of Economy and Planning, Mr. Samir Saïed, thus indicated that the state had identified the projects of the Sfax Metro, the Gargour-Sfax Logistics Zone, the Sidi Bouzid Agricultural Production Platform, the headquarters of several ministries as potential PPPs , the Zaghouan cable car, the hydromechanical 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 when the planet is on fire. ” Projects such as seawater desalination, photovoltaic electricity production, wastewater reuse fall within this framework, he said.

The African Development is working on the establishment of a multi-donor Africa PPP development fund to enable the establishment of well-prepared and bankable projects.

Recognizing the seminar’s success as a platform for exchanging ideas and strengthening cooperation in North Africa, Mr. El Azizi said the Bank would “work to make it an annual forum”.

Mr. Atef Majdoub, President of IGPPP Tunisia, welcomed the announcement. “We will hold a seminar every year, with the organization rotating to each of the six countries in the region to share experiences and transfer knowledge,” he said.

The seminar brought together all authorities responsible for PPPs in the six countries of the region, as well as promoters, banks, representatives of different administrations and lenders.