BRAZZAVILLE. — International stakeholders called on African countries to create a conducive environment to increase Public-Private Partnership (PPP) projects at the Fifth Investing in Africa Forum that ended here on Thursday last week.
According to a document distributed by the forum, which focuses on leveraging partnerships for economic diversification and jobs creation in African economies, infrastructure is an indispensable foundation for growth and connectivity and Africa’s infrastructure gaps are large with a financing gap estimated at US$68 billion to US$108 billion per annum.
The document said PPP projects are therefore essential for financing the provision of these public goods.
Zhang Zhiqing, deputy director-general of foreign capital utilisation department in China’s National Development and Reform Commission, said on Wednesday that African countries need to create a competitive environment to attract PPP projects, stressing that factors including political situation, legislation on PPP, financial markets and business environment would have a impact on such investment.
Zhang urged African countries to formulate development plans on PPP projects to ensure each party will shoulder a fair and reasonable share of potential risks. He added that African countries also need to improve the supervision framework and protect the rights of investors.
“The competition of attracting private investments is basically a competition of policy and business environment,” Zhang said.
A PPP is a long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility and remuneration is linked to performance.
Noting PPP projects are developing fast in the continent,Yang Baohua, chairwoman of China Africa Development Fund (CAD-Fund), said on Wednesday that the fund planned to deepen its studies on the investment in Africa to better explore the market.
Yang said in addition to working out related laws on PPP and drawing development plans, African countries need to carry out feasibility studies on major projects, so as to provide private investors with more projects that would be supported by financing.
Yang also called on the African countries to allow more private capital to take part in infrastructure investment.
Jean Claude Tchatchouang, executive director of Africa Group II with the World Bank, said on Wednesday, “We need to invite the private sector, in order to do so we need reforms to attract the private sector.”
“We are encouraging our Chinese partners to come and invest in Africa,” Tchatchouang said.
During the meeting, a total of seven documents, including a Memorandum of Understanding (MoU) for China-Africa regional aviation cooperation and MoU for the overall cooperation on African cement projects, were signed.
Xu Hongcai, Vice Minister of China’s Ministry of Finance, said on Wednesday that the achievements of the forum would further deepen China-Africa cooperation.
According to official data, more than 3 700 Chinese enterprises have been set up in Africa by the end of 2018, with combined direct investment over US$46 billion. Moreover, China’s financial institutions have established more than 10 branches in Africa.
The three-day event, co-organised by the government of the Republic of Congo, China’s Ministry of Finance, China Development Bank and the World Bank Group, attracted about 600 delegates from 40 countries and regions.
Issues such as human capital development,digital revolution, innovations and the new service economy and public and private partnerships and investment climate were discussed at the forum. — Xinhua.