According to the African Development Bank, Africa’s infrastructure gap stands at approximately US$50 billion per annum. Traditional sources of financing, such as taxation, government borrowing and aid, cannot be squeezed any further to close it. As a result, governments have turned to public-private partnerships (PPPs) and foreign direct investment (FDI) as a source of financing, while the private sector and international companies seize the opportunity given the scale of demand.
PPPs will play an important role in providing a viable structure in which to attract FDIs across critical sectors on the continent. The two will work in tandem with each other to share local investor risk and relieve the burden or guaranteeing the entire project and raising its own financing.
We spoke to a series of industry experts on the risks and opportunities surrounding PPPs and FDIs, and which countries are already unlocking the benefits of adopting these structures. Part two explores the possibilities that FDI provides across critical sectors on the continent, through interview with subject experts at King & Wood Mallesons (KWM):