The uncertain future
"Out of the 12 physical projects linked to NEPAD for which the ADB has approved financial support for the past three years, only one involved the private sector." Besides dealing with the biggest obstacles--poor and corrupt political leadership, war and trade barriers-NEPAD, according to a survey conducted last year, is largely unknown on the continent.
Key infrastructure projects lined up under the New Economic Partnership for Africa's Development (NEPAD) faces uncertain completion dates as the private sector financiers give them a wide berth. The situation is not being made any better by the emerging leadership wrangles among some Africans in the Diaspora who were expected to play a significant role in the development of the continent through advocacy and mobilisation of resources for investment.
Last week, the African private sector came in for heavy bashing over its inability or unwillingness to effectively participate in the earmarked infrastructure programmes, leading to erosion of Africa's ability to participate and compete effectively in global trade. The African Development Bank's (ADB) interim Vice-President, Operations North, East and South, Mrs Zainab El Bakri, said participation of the private sector in developing infrastructure - the bedrock of any sustainable economic turnaround - was pathetic. "The low level of private sector participation in investments in infrastructure projects is worrying both the bank and NEPAD," she said.
She said in contrast to the lukewarm interest of the private sector in African infrastructure programmes, the sector had been an active participant in the provision of infrastructure in other developing regions of the world. "The result of this participation has been significant, not only in terms of financing, but also in technology transfer and efficiency gains," she said. El Bakri's concerns over private investments in NEPAD infrastructure projects are expressed in a statement issued ahead of the just concluded meeting of the bank's board held in Abuja, Nigeria last week.
African leaders have warned that Africa's ownership of NEPAD would only be to the extent to which it was driven by Africa's resources. Nigeria's President Olusegun Obasanjo is on record as saying it was essential that in order to retain African ownership and leadership of NEPAD and all its processes, core funding should come from Africa. "Funding from our external partners, though welcomed, should mainly be utilised for augmenting and complementing our own efforts, especially in the area of implementation of NEPAD programmes and capacity building," he said.
NEPAD has identified many energy, transport, telecommunications and water projects that are critical to Africa's integrated development. The projects are at various stages of development and require funding. The view of the initiating presidents was that, unless the issue of infrastructure development was addressed on a planned basis - linked regional integrated development - the renewal process of the continent would not take off. The NEPAD concept emerged out of ideas held by South Africa's President Thabo Mbeki, Abdoulaye Wade of Senegal, Obasanjo and Algeria's Abdelaziz Bouteflika.
According to El Bakri, of the 36 physical projects approved under the NEPAD Heads of State and Government's Infrastructure Short Term Action Plan (STAP), only half are expected to attract financing from the private sector. El Bakri lamented that nearly three years after the launch of STAP, it was clear that private sector engagement in financing of NEPAD infrastructure projects, which were largely multi-country infrastructure projects, had not been forthcoming. "Out of the 12 physical projects linked to NEPAD for which the ADB has approved financial support for the past three years, only one involved the private sector," she said.
The Bank has assumed a leadership role in regional infrastructure at the request of NEPAD Heads of State Implementation Committee. An interview carried out last year by PricewaterhouseCoopers, an international investment services company, covering nearly 250 business heads in Kenya, Tanzania and Uganda revealed a scant understanding of NEPAD. It found that only 38 per cent of the chief executives believed that NEPAD would succeed and that 32 per cent thought it was unlikely to succeed (the remainder were undecided). Most thought the biggest obstacles facing NEPAD were poor and corrupt political leadership, war and trade barriers. "The private sector," commented the survey, "recognises the potential benefits of NEPAD. However, NEPAD must make a greater effort to build awareness of its goal."
Top leadership of the bank is convinced this is still possible despite the persistent lukewarm interest in the infrastructure programmes. El Bakri said in order to encourage private sector partnership in the provision of infrastructure, ADB was already working out ways to support activities aimed at improving the financial as well as the legal and regulatory infrastructure in a number of African countries. According to the NEPAD Secretariat chairman, Prof Wiseman Nkuhlu, through better partnerships with private sector more could be done in the area of infrastructure development on the African continent. He noted that while ADB had played significant role in projects' financing, it did not do so to compete with any other financial institutions. What the bank was doing, he added was merely to provide the seed money to fast track investments in infrastructure on the continent. He expressed regret the private sector and most of the African governments were not paying adequate attention to financing of infrastructure projects.