Recommendation Submitted by AFRODAD to the Independent Experts Meeting on Finance, Monetary Affairs, Economic Planning and Integration
PPPs are increasingly promoted as a way to finance development projects and as a new way to entice the private sector to finance public projects. Following the FFD conference in Addis Ababa in 2015, there has been an increased urgency by many African governments to use PPPs as means to deliver on the SDGs. A number of African states have put in place changes in national regulatory frameworks to allow for PPPs, as well as provide advice and finance to PPP projects. However, it is important to note that despite the promotion of PPPs, private finance only provides about 15–20 per cent of total infrastructure investment globally. The majority of funding for infrastructure in both developed and developing countries is the domain of the public sector. While private sector has the potential to contribute to funding infrastructure development, it is the improvement of the public sector delivery that will be critical to address the continent’s infrastructure needs. While PPPs can provide Member States the opportunity to leverage resources from the private sector, PPPs are complex contractual undertakings and bear borrowing risks. To avoid that the contingent liability of PPPs turns into a debt burden, Member States must strengthen PPP frameworks and regulation at the national and regional levels. This requires legal, managerial, and technical capacities to clarify the roles and responsibilities of contracting partners, provide clarity in case of litigation, plan and monitor implementation effectively, and carry out robust investment appraisals and financial analysis.