Private sector development in Africa requires creative approaches to stimulating increased private participation in public delivery of services. Both public enterprise reform and public-private partnerships are two approaches that work with the private and public sector entities to grow the economy and improve public service delivery.
Public-Private Partnerships (PPP) can refer to a variety of arrangements whereby one or more private sector parties enter into an agreement with the government to provide a public service and assume substantial financial, technical, and operational risk in the project. PPPs have received increased attention in recent years as a key instrument through which within a broader strategy development sub-Saharan Africa’s infrastructure and public service deficits can be addressed.
In recent years, Africa Finance & Private Sector Development Department (AFTFP) have responded to client demands to develop public-private partnership programs aimed at the provision of core and social infrastructure. AFTFP assists its client Governments in developing legal and regulatory frameworks for PPPs that provide a suitable business environment for private sector companies to engage in PPP initiatives. AFTFP has works closely with other donors and trust fund facilities such as Public Private Infrastructure Advisory Facility (PPIAF) to first identify the gaps in the existing PPP enabling environments and second provide policy solutions to filling these gaps drawing on international best practices.
Several lead countries in sub-Saharan Africa have undertaken extensive PPP diagnostic work and PPP Programs. Downstream support comes in the form of specific capacity building initiatives to key agencies responsible for a country’s PPP program and in terms of technical & financial assistance to specific PPP transactions.
These PPP development programs have provided resources for capacity building and technical assistance, transaction support, investment funding and public and private infrastructure financing products including viability gap funds, financial intermediary loans, and partial risk guarantees.