The economic challenges facing many counties today are complex, often requiring solutions that blend the efficiency, innovation, and capital of the private sector with the regulatory powers, oversight, and social responsibility of the sovereign governments. The combination of resources, expertise, and risk-sharing mechanisms through public-private partnerships (PPP) create win-win solutions that promote sustainable economic growth.
All over the world, public-private partnerships have revitalized sectors like transport, healthcare, and agriculture, creating thousands of jobs and driving development. The Gautrain Rapid Rail Link in South Africa, for example, resulted in 34,800 jobs during construction and 922 after completion, having a significant impact on GDP and property values in the area.
More PPP projects ripe for investment, within the framework of the Africa Continental Free Trade Area (AfCFTA), will be showcased at the 4th African Sub-Sovereign Network (AfSNET) Conference in Kisumu, convened by African Export-Import Bank (Afreximbank), County Government of Kisumu, and United Cities and Local Governments (UCLG) of Africa from 25-27 November.
Public-Private Partnerships present a unique opportunity to accelerate the realization of the Africa Continental Free Trade Area (AfCFTA). By establishing the world’s largest free trade area by population, AfCFTA will increase intra-African trade and open vast markets for goods and services. However, the private sector on its own cannot scale an equitable and sustainable supply of goods and services to the 1.4 billion people on the African continent. Governments – both Sovereign and Sub-Sovereign, on the other hand, rely on the innovation, expertise, agility, and capital of the private sector to improve infrastructure and advance trade growth across the African continent.
Implementation of the AfCFTA is heavily dependent on infrastructure. Roads, railways, ports, and digital infrastructure are required to ensure goods and services move efficiently between countries. PPPs can fill these gaps by enabling large-scale projects that might otherwise be impossible to implement when undertaken by either governments or the private sector alone.
One of the most significant benefits of PPPs is their capacity to foster innovation. Driven by competition and the need to remain relevant, private sector organizations are agile in their industries. When this is combined with the regulatory framework and commitment to equitable access that characterizes the public sector, PPPs can yield innovative solutions that serve the public good while maintaining profitability.
Adding efficiency to innovation is another advantage of pursuing public-private endeavors. Unlike government entities, private companies have profit motives that push them to minimize costs and optimize operations. This efficiency leads to better service delivery, timely project completion, and more effective use of resources. When public institutions work with private companies, they tend to adopt more streamlined approaches to problem-solving, creating a ripple effect that makes the specific government processes more efficient.
PPP projects lean on local labor and all manner of local businesses to source raw materials. These infrastructure projects stimulate local economies and create secondary job opportunities in nearby communities.
We saw the power of public-private partnerships in full display at the height of the COVID-19 pandemic. The private sector and governments all over the world joined forces to build sustainability and resilience against an economic and public health crisis. They worked together to mobilize resources, distribute critical healthcare supplies, and support the continuity of essential services.
While PPPs offer benefits, they also present the need for accountability and transparency due to their involvement in significant public investment and long-term commitments. They require strong oversight mechanisms to ensure that private companies do not prioritize profit at the expense of public interest. Transparent agreements, clear performance metrics, and regular evaluations are essential to maintaining public trust and ensuring that projects meet community needs.
Forums like the 4th AfSNET Conference provide invaluable insights into addressing some of the continent’s most pressing challenges, as sub-sovereign governments seek to provide better services to their citizens with the help of private sector players.
Related Content: Afreximbank Gathers African Experts In Kisumu To Discuss Intra-African Trade
The writer is the Governor of Kisumu County and Chairman of the Lake Region Economic Bloc (LREB).
