The government should create a facilitative framework that promotes increased private sector investments in infrastructure development to ease rising burden of public debt, the World Bank Group has said.
The lender says in the annual Africa’s Pulse report, a bi-annual analysis of the state of African economies, that at least half of infrastructural finance needs in sub-Saharan countries should be met through Public-Private Partnership initiative.
Kenya’s public debt more than doubled to Sh3.827 trillion, or 51.50 per cent of the national wealth, last December compared to about Sh1.89 trillion that the Jubilee administration inherited in June 2013.
President Uhuru Kenyatta on April 10 defended rising debt, arguing the bulk of it was going into infrastructural development to support economic growth.
“The money is not going towards payment of salaries or consumption but to projects that will spur economic growth and create employment,” he said when he launched government’s delivery portal. “You can’t grow an economy or a country unless you have access to resources.”
World Bank chief economist for Africa Albert Zeufack said on Wednesday that although Public Private Partnerships are yet to take off in sub-Saharan Africa, they have the potential to play a big role in infrastructural development.
“When we say public private partnership, it is not necessarily foreign investors. Governments need to work to get into partnership with the domestic private sector,” Zeufack said. “I think the idea that there are no private sector investors that are available in Africa is not correct.”
Zeufack said policy uncertainty has affected business confidence on the continent. He urged the government to formulate quality institutional frameworks and create a favourable business environment in order to increase domestic PPPs.
The African Development Bank has set up a public private partnership advisory hub in its regional office in Nairobi where the lender helps government institutions to identify and manage PPP projects. Some of the capital-intensive infrastructural projects lined up under the PPP framework include dualling and upgrading of the Nairobi-Mombasa highway, Nairobi-Nakuru-Mau Summit highway and, operation and maintenance of Nairobi-Thika superhighway.
