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The African Development Bank (AfDB) has identified a monumental challenge for Africa: the continent requires between $130 billion and $170 billion annually for infrastructure, yet faces a financing gap of $68 billion to $108 billion. Unfortunately, Gross Fixed Capital Formation averages around 13% of GDP, significantly below the 30% threshold needed for sustainable economic growth. In the aftermath of COVID-19, many African nations are grappling with slow economic recovery, constrained tax bases, and difficulties in mobilizing domestic revenue for crucial infrastructure projects. In response to these pressing challenges, Public-Private Partnerships (PPPs) are emerging as a powerful solution to bridge this infrastructure financing gap. PPPs are not just an option; they are becoming crucial in attracting private sector capital, expertise, and efficiency to drive growth. Countries like South Africa, Kenya, Nigeria, Egypt, and Morocco are leading the charge in embracing PPPs, while others are on the cusp of realizing their potential. There is growing evidence of the acceptance of PPPs as an infrastructure delivery mechanism elsewhere on the continent following the conclusion of financial close on the Kampala-Jinja Express Highway in Uganda, the commissioning of the Beitbridge Border post in Zimbabwe and the financial close on the Bus Rapid Transit PPP project in Dakar, Senegal. This article highlights how Africa can accelerate infrastructure development by fully leveraging the numerous advantages of PPPs.
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The African Development Bank (AfDB) has identified a monumental challenge for Africa: the continent requires between $130 billion and $170 billion annually for infrastructure, yet faces a financing gap of $68 billion to $108 billion. Unfortunately, Gross Fixed Capital Formation averages around 13% of GDP, significantly below the 30% threshold needed for sustainable economic growth. In the aftermath of COVID-19, many African nations are grappling with slow economic recovery, constrained tax bases, and difficulties in mobilizing domestic revenue for crucial infrastructure projects. In response to these pressing challenges, Public-Private Partnerships (PPPs) are emerging as a powerful solution to bridge this infrastructure financing gap. PPPs are not just an option; they are becoming crucial in attracting private sector capital, expertise, and efficiency to drive growth. Countries like South Africa, Kenya, Nigeria, Egypt, and Morocco are leading the charge in embracing PPPs, while others are on the cusp of realizing their potential. There is growing evidence of the acceptance of PPPs as an infrastructure delivery mechanism elsewhere on the continent following the conclusion of financial close on the Kampala-Jinja Express Highway in Uganda, the commissioning of the Beitbridge Border post in Zimbabwe and the financial close on the Bus Rapid Transit PPP project in Dakar, Senegal. This article highlights how Africa can accelerate infrastructure development by fully leveraging the numerous advantages of PPPs.
Read more.
