Public-private linkages
Back to the future for African infrastructure? Why state-ownership is no more promising the second time around
Making private participation in infrastruture initiatives work
Authors:
J. Nellis
Publisher:
Center for Global Development, USA, 2006
Many African state-owned enterprises (SOEs), particularly those in infrastructure sectors, have a long history of poor performance. Since the 1990s, there has been heavy reliance on private sector participation and ownership, but Africa’s private participation in infrastructure (PPI) initiatives have been comparatively few and weak. This paper argues that, although surveys demonstrate a preference in Africa for state-owned over private firms, African states (and their supporters) should not jettison the PPI approach. It notes that they should acknowledge its limitations, and recognize the large scope and moderate pace of the preparatory measures required both to improve their investment climates and to make PPI work effectively.
Some of the conclusions are:
- the most productive path is to recognize the limitations of the PPI approach, and to work harder at creating the conditions needed to make it function effectively
- for the private sector to perform well, public sector capacity must be enhanced
- Africa has huge infrastructure needs that, for various reasons, are not being addressed the only way that is financially possible: with private money
