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Public-Private Partnerships crucial to finance development in Africa, says Songwe

A three-day forum showcasing projects and approaches to people first Public-Private Partnerships and how the United Nations is working together as one to implement the 2030 Agenda for Sustainable Development opened in Geneva Wednesday with Economic Commission for Africa’s (ECA) Executive Secretary, Vera Songwe, calling for the advancement of PPPs to finance development in Africa.

In a keynote address to the 4th International Public-Private Partnerships Forum, Ms. Songwe said the private sector has a huge role to play as an important driver of growth and poverty reduction on the continent given the significant financing challenges being faced by governments as they strive to achieve the SDGs.

A lot of infrastructure is funded through PPPs, globally, the ECA Chief noted.

“However, the landscape of PPPs is not well defined and there is much work needed for both the public and private sector to understand the merits of PPPs. They must be defined accurately, and used well,” she added.

“Neither the private, nor the public sectors can finance development alone. There is need to understand blended financing and new asset classes as we the address tensions within PPPs, which involve multiple coalitions, in order to fully maximize their usability in critical areas, including water and sanitation.”

There are success cases on the continent, said Ms. Songwe. “In the energy sector, PPPs have been done well and right. This now provides opportunity for the private sector to replicate similar projects, based on lessons learned,” she told delegates to the Forum.

Ms. Songwe said two major lessons that have emanated from this experience include the need for stability of PPP contracts; and reasonable allocation of risks.

Currently, risks in PPP projects, tend to be heavily skewed towards the public sector. This imbalance needs to change with risks being adequately allocated between the two sectors, she said.  As an example, the ECA Chief noted, guarantees are 100 percent debt.

“From a macroeconomic perspective, this arrangement disadvantages governments. This needs to change in a manner that shapes risks and rewards,” Ms. Songwe added.

ECA has set up the Private Sector and Finance Division, part of whose work is to support member countries in implementing PPPs, she said.

The Commission is encouraging countries to implement at least one or two PPPs, experience of which would provide them with knowledge and information on proof of concept before standardizing them.

However, capacity building which needs a whole of government approach to establishing the pipeline of PPP projects, is required. This approach, should be inclusive of the ministries of finance and public investment agencies, which are on the ground in countries.

“There is need to learn from success stories, and also leverage emerging opportunities. There is a new frontier of digital technology. We now need to structure PPPs for broadband, beyond what we have learned for roads and energy,” the Executive Secretary said.

She acknowledged that UN Regional Commissions are playing a significant role through exchange of information, experience and ideas, given the current numerous global changes.

In light of the upcoming 2019 UN General Assembly High-Level Dialogue on Financing for Development Conference in September in New York, the Executive Secretary called upon participants to generate actionable ideas and key messages that can be presented by the UN Regional Commissions, to help leverage all available financing.

The Forum, organized by the United Nations Economic Commission for Europe (UNECE) in cooperation with the ECA, is a unique platform bringing together hundreds of experts from the private sector, academia, civil society and UN member states to discuss the future of people-first PPPs.

The Forum, which runs from 7-9 May, 2019 under the theme: The Last Mile: Promoting People-first PPPs for the UN 2030 Agenda for Sustainable Development, aims to increase the expertise of governments to identify, negotiate, manage and implement successful PPPs projects.

Executive Secretaries Rola Dashti of the Economic and Social Commission for Western Asia (ESCWA); Alicia Bárcena of the Economic Commission for Latin America and the Caribbean (ECLAC); Armida Alisjahbana, Economic and Social Commission for Asia and the Pacific (ESCAP), Oľga Algayerová, Economic Commission for Europe (UNECE), also attended the meeting.



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