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Written by: Heleen Goussard, head of unlisted investment services, RisCura
At a recent conference on funding infrastructure in Africa held in London, a fellow speaker lamented the lack of solutions these events yielded. His observation was that it was the subject of discussion and it was the same, but it seemed to me that it was a problem that in Africa, but also to try and think of some creative solutions.
Corruption
The first session highlighted a number of issues, but the most pugnacious point of view only] problem with getting infrastructure financed on the continent is corruption .
Although it is widely distributed in African government, it affects the procurement of infrastructure disproportionately.
for the infrastructure are inflated by 20% -30% by
The large size of contracts and lack of directly comparable pri cing permits large-scale corruption that is difficult to detect.
The building of infrastructure is (from governments' point of view) really just a large procurement process, the answer to the problem
The next repetitive theme from 1965 to 1965 to create a more effective and more efficient way of doing business. those involved in funding infrastructure is the lack of bankable projects .
Although the need for infrastructure is almost infinite, projects that have political support, can be paid for by the government and are commercially-attractive to private investors, are few and far between. However, it is worthwhile spending a moment in the minds of the private sector.
Private Sector Partners (PPP) it will be enabled to do so, they are paid to do, transact and deploy cash. But, one wonders if it is the most effective place for
Like any project process, time and effort is the planning and risk identification phase
Surely, by this reasoning, the first area where capacity should be determined, they will have the largest flow through effect on economic growth.
These projects should then be evaluated for private sector funding, and what risks and obligations the government will be exposed to depending on the method of funding
All of this requires an unbelievable amount of specialized knowledge. This study is difficult to make and the best practice in the world.
Best practice
But, what if African countries could share skills and learnings? What if they could lean on the core of the need for skills and resources to badist independent authorities (or any other government body, including PPP units) to fulfill their mandate, ounce across 54 countries?
Like all ideas, the possible problems with the solution are almost as complex as it is trying to solve! For example:
- Such a central body would need to win the trust of the public.
- The political will to change a status quo that allows politicians to benefit from large infrastructure contracts may be limited.
- Recruiting and retaining suitably skilled staff in a central body may be difficult.
From the above, it is Clearly, the solutions to Africa's infrastructure funding problems are not so simple (and that I was unlikely to solve them), but we would still be able to Same conversations at the same conferences.
In our industry [private equity] we often talk about compounding over time pectacular effect on the outcome of an investment.
Investing in infrastructure has a far-reaching and compounded impact on economies. Making the best possible decisions when planning and procuring infrastructure is imperative for Africa.
The right choices could lead to greater growth and higher growth,
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