However, a lack of modern infrastructure is a major challenge to Africa’s economic development and constitutes a significant impediment to the achievement of sustainable development goals.

The PPP Model: A Challenging Step.

Facing the dearth of infrastructure funding, an increasing number of countries, notably emerging markets and developing economies a need arises to make an impactful attempt to Public-Private Partnerships (PPPs) in order to tap private capital.

PPPs in Africa remain a very small market, with projects concentrated in only a few countries, namely, South Africa, Nigeria, Kenya, and Uganda. We recognize that some African countries are hesitant to embark on PPPs as a result of prior bad experiences with ill-prepared PPPs or even with less-than competent PPP project sponsors.

It is broadly understood that public-private partnerships (PPP) are a procurement tool that encompass design, financing, construction and long-term operation of a public infrastructure by the private sector. They can be cost-effective thanks to adequate risk transfer and performance criteria, and help bridge Africa’s large infrastructure gap in many sectors.

The only question that strikes the mind is “What can African Government do have an effective PPP”?

Classifying potential PPP projects from the outset using the three criteria outlined above could help not only focus on the specific legal and institutional issues that are most relevant to the projects, but also on the viability issues that are critical to attracting private investors—which could include required government funding, the creditworthiness of national utilities or the financial capacity of users.

Many African countries could create precedent and bring in private capital to address their infrastructure needs. A PPP proverb by world bank strikes the issue “ Little drops of water via small projects makes an ocean of PPP projects in due course”

In order to have a successful PPP Model what is actually needed to be implemented is as follows:

Political Commitment: The Government should be effective enough to have a strong hold and control over implementation of the model.

Stakeholder Engagement: Steps shall be taken to increase stakeholder engagement by involving them with seminars, discussions etc. There shall be a proper one to one coordination between the government and the stakeholders to stay on one uniform road.

Strong involvement of development institutions (Both Public & Private): A strike of balance has to be maintained between both the institutions to let the model flourish in exact terms. Uniformity in decision making is the ultimate step that is needed.

Clear and Visible Benefits: the achievement through the initiative must be lucid enough to set a goal to achieve and the implications must be beneficial in order to support the infrastructural goals.

http://www.africagateway.info/sector/Tenders-Infrastructure-and-construction

As Africa is a economy in transition resulting in growing consumer class which add up to the healthcare system. This further takes it on the track of fastest growing pharmaceutical market. The market is still under explored owing to the global attention it has gained over the years it still poses a great opportunity for business.  It is worth noting that more than 70% of the medicines in Africa are imported Apart from a few countries (like Egypt, Algeria, Morocco and South Africa), the rest of Africa is unable to produce enough drugs and medicines to satisfy local demand.

Apart from opening the market for the International investors Government is extensively procuring pharmaceutical products. Government has been inviting for pharmaceutical tenders for medicines, beds, Laboratory Apparatus and Laboratory Equipments, sanitary supplies and many others. In a bid to improve its healthcare provisions Government has been inviting request for proposals and quotations for procuring establishment of medical laboratories and plants especially in areas where there is no access to the medicines. Government initiatives are also supported innovations in the delivery model that might help increasing capacity a further more.  With over increasing dependence on the imports of the generic drugs the Government has been largely initiating Pharmaceutical projects in terms of local manufacturing and research centres.

Moreover, African diseases are been attracting huge attentions from the International pharmaceutical companies to venture the market. international pharmaceutical companies like GlaxoSmithKline, Johnson & Johnson and Sanofi have already established their footprints in the African market. Apart from entering into public contracts for pharmaceuticals in Africa one can consider partnering with the local producer to enter into the market. For instance Cipla has entered into partnership with Emanuel Kantongole a drug manufacturer in Uganda, the company today produces 600 million tablets antiretroviral drugs every year and has become one of the largest manufactures in East Africa.

Similarly Johnson& Johnson partnered with South African government and has been imparting knowledge on maternal care and new born baby care. global pharmaceuticals companies need local business partners, manufacturers, packaging companies, and distributors—to help them navigate the continent’s many markets, with their widely varying consumer preferences, price points, manufacturing, and distribution infrastructures.

Africans have to be involved in the pharmaceutical sector in a much more extensive way than they are now, along with continuing partnerships with international companies and a renewed focus on education and building the skills necessary to nurture the next generation of African researchers and pharma leaders

Africa will continue to grow for the foreseeable future. Now is the time for drug companies to decide whether they want to be part of that growth and, more important, play an active role in improving public health.

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With global economies shifting their focus towards renewable energy Africa still depends on Fossil fuels as a primary source for power generation. Africa’s current installed capacity is 147Gw which is equivalent to the total install capacity that china adds every one or two years. The continent’s power infrastructure is significantly underdeveloped whether we look at the installed capacity or the consumption levels.

According to the International Energy Agency Africa will require a potential investment of 30bn$ to attain 100% electricity access by 2030. The government has started taking progressive steps towards electrifying Africa; one of the initiatives worth mentioning is Power Africa. In 2013 Power Africa was launched by the former US president Mr Barack Obama with an aim to develop new power generation capacity and connect millions of households and businesses to on-grid and offgrid power across sub-Saharan Africa.

After three years of operations Power Africa has supported private companies and utilities in connecting 10.6mn households and facilitated the financial closure of 80 private sector transactions that generate more than 7,200 MW of power. Power Africa is now among the largest public-private partnerships for development in history, having mobilized more than $54 billion in commitments towards achieving Power Africa’s goals from its more than 140 public and private sector partners.

Along with undertaking developmental initiatives government has been shifting its focus towards making its power sector a lucrative investment hub for the international energy contractors in Africa.  Renewable energy contracts have been awarded to international EPC contractors to participate in the African power market. For instance,  A consortium featuring MAN Diesel & Turbo and Danish EPC-Specialist, BWSC, has won the contract to build the new 127 MW Maria Gleta power plant near the city of Cotonou, Benin. Similarly, ibvogt, German developer and EPC have won a contract to construct 166.5 MW solar farms in Egypt. Indian solar EPC firm Sterling and Wilson has won a contract to build 54.3 MW solar PV plant in Zambia.

The French renewable company Neoen will serve as Independent Power Producer (IPP) of the plant when it will be commissioned.  Andritz Hydro of Austria and Mota Engil of Portugal are currently completing their final designs and initiating procurement and manufacturing for the rehabilitation, upgrade, and modernization of the Nkula A hydropower plant that will increase the plant’s generation capacity from 24 MW to up to 36 MW, and provide a new station control system, a new 66 kV switchyard, and new transformers.

Moreover, government is extensively procuring energy equipments in order to meet its expanding demand for power. It has been calling for expression of interest in Renewable energy tenders for large projects. Government is extensively procuring services like transmission lines, photovoltaic rooftops, construction of water pumping system, Supply of Batteries for Solar Panels etc.

Potential Buyers  in power Sector in Africa  like Eskom Holdings, Energy Fund, Ministry Of Energy And Petroleum, The Tanzania Electric Supply etc are seeking EPC contracts for large renewable energy projects. In a bid to meet is goal of 100% access to electricity by 2030 PPA are inked with the international firms making their access to African market easy.

The Nigerian Bulk Trader signed power purchasing agreements (PPA) on 14 solar independent power projects (IPP) in July 2016. These solar IPPs, totaling 1,125 MW of generation capacity, are expected to attract more than $1.5 billion of combined domestic and foreign direct investment. Kenya Electricity Transmission Company (Ketraco) has inked a Shillings 24.2bn ($US 239m) deal with China Electric Power Equipment and Technology Company (CET) to electrify the Mombasa – Nairobi section of Kenya Standard Gauge Railway (SGR).

Though the continent faces power challenges these initiatives bring the momentum in change. Government has demonstrated the will to prioritize efforts and keep an eye on long –term improvisation of capabilities to create a thriving power industry and achieve its goal of universal access to electricity.

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macroeconomic Profile

Nominal GDP 43.02 bn$

GDP per-Capita 4265.40 USD

Inflation 4.8 %

FDI stock 678.20 million$

Ease of Doing Business 77/190

Credit Ratings B

The economic growth rate of the region has stabilized over the past years with the government making greater strides to advance its political transformation. The Prosperity has been largely driven by growth accelerated investments along with large projects outlining national development plans along with speeding up of structural reforms. Over the years, Tunisia has demonstrated all the distinctive characteristics of the dual economy with a well-developed modern industrial base.

Tunisia has an economics concentrated largely into service sector followed by Tourism, Agriculture, Manufacturing of machinery and cables, textiles production, and the IT industry and IT-related outsourcing.

Tunisia’s agriculture is rich in olive production, Europe, and Saudi Arabia are amongst the largest importers of olives from Tunisia. In a bid to enhance the sector growth and attract large investments. The regional commission on agriculture development has been encouraging the local entrepreneur to acquire olive plants to enhance its export potential. The Regional commission on Agriculture development has floated agriculture tender inviting domestic bids for acquisition of olive plants, Olive Seedlings, olive Nurseries, transport of herbaceous olive cuttings etc as a part of development of agriculture season programme. Moreover, AFDB has been funding major sector policy reforms to garner the sector with profits.

Equally important the country has been experiencing export competitiveness into the service sectors like banking and tourism. Major banking reforms have helped Tunisia demonstrate a stable performance. Moreover, Tourism is strongly forming a main stay in the economy contributing 15% to economic GDP.

Telecom is yet another promising sectors that have managed to sustain the growth, 5 million$ have been invested into Tunisian Telecom infrastructure development to help sector drive further drive the economic growth. major telecom operators like Tunisie Telecom, Orange Tunisia, SYSTEC etc have providing telecommunication services to Tunisian citizens. Systec has won government telecommunication contract worth 4,155bn $ for the provision of cameras for the project financed by the European Union. Its open investment regime allows a foreign investor to hold 100% capital of the project without any authorization has helped it attract huge international attention. Tunisian has a flexible cross border trade regime that allows the foreign firms to hold 100% capital in the projects. opportunities for competitive bidding from Tunisia are largely into Consulting, Civil engineering works, Project monitoring etc. Tunisia has gained praises for its well-developed infrastructure across the world that has today made it one of attractive business destinations. According to the procurement statistics for Tunisia, billion$ of government procurement has been into infrastructure and construction sector. The government has also sought financial assistance from the multilateral institution. EIB or UNDP 0r AFDB funded road construction projects, modernization projects, motorway projects, market place rehabilitation projects are under pipeline and some of them on the verge of completion by 2018

The government has been wisely utilizing the procurement vehicle to drive the economics of the major industries in Tunisia. Be it telecommunication, IT or Manufacturing, the government has been participating actively by procuring state of art technologies from outside that would enhance her home industries. Moreover, with the international presence of countries like Europe and Italy, France, Germany etc. have helped Tunisia maintain stable growth profile.

Apart from strong oil industries, Sudan’s industrial set up consists of light manufacturing industries, petroleum industries, agriculture and food processing industries etc. These sectors have predominantly contributed 30-40% to the current GDP growth rate. Sudan has a well-developed infrastructure compared to other sub-Saharan countries in Africa. Sudan’s medical industry has a potential to become a Medical hub for the African Economy. Medicines exports account for almost 70% of the Sudan exports and government is also concentrating in the procurement of services that will enhance its capacity to achieve its dream. Tenders are invited for Procurement of Medicines for The Federal Ministry of Health and the National Medical Supplies Fund in Sudan. The ministry of health has been inviting tenders for Provision of Lab Consumables in Sudan. Many of the pharmaceuticals government tenders are being funded by the world bank and other financial institutions in order to bridge the funding gap. Government procurement is enhancing the country’s potential to achieve its dream.

Sudan has a great potential for hydropower development, currently, the economy has 180mw of installed hydropower capacity. Moreover, large hydropower projects are underway in Sudan. Recently, China Gezhouba Group Co Ltd has signed a contract worth nearly US$1.4 billion or RMB 8.87 billion to build a hydropower station in South Sudan by 31 Dec 2019. The Sudan’s Ministry of Electricity and Dams (MED) plans to build 540 MW hydro power plant in Bedden, Juba. The Project is in the execution phase and is expected to be completed by 31 Dec 2019. These are some of the major hydropower projects undergoing in Sudan.

Agro-processing being another essential industry, government procurement from agriculture in Sudan has increased over the year. Tender notices for procurement of Buckets & Funnels with Filter, Water Pumping System, electric water pumps etc are published regularly on government tender portals. Moreover, additional financing is a norm in Africa, therefore funded projects in Sudan for food security, livestock and crops protection, up gradation of irrigation system etc are being actively undertaken to bring development to the sector. Sudan is known as world’s potential bread basket as it has one of the dynamic agricultural industry.

Government procurement in telecommunications is huge in Sudan. The government is actively undertaking measures to upgrade its telecommunication infrastructure. Recently, Sudatel Telecommunication Group has floated an expression of interest for Contracting of the Procurement, Construction, and Commissioning of New Telecom Stations. UNDP has floated a tender notice requesting for quotations to a potential bidder for procurement of ICT equipment for DDRC Offices. Anglo Petro for Integrated Solution CO has won government telecommunication contract for procurement of internet services in Sudan. Zain Telephone CO. LTD has won a telecommunication contract in Sudan for Local and long-distance telephone communications.

The economy is diversifying from oil based economy to a more industrialized economy that is promising Sudan long term growth prospects.

Moreover, the government is inviting for International Competitive Bidding into Morocco Renewable energy sector from across the globe. For Instance, Ministry of the Economy and Finance has floated a renewable energy tender notification in Morocco for procurement of support services for strengthening the energy sector.  Public contracts in renewable sector have also proven to be imperative for the sectoral growth.

In the recent years, the government has shifted its focus to the development of the industrial activity. Major investments are to be undertaken by the government to boost the industrial development. Business opportunities in Morocco are largely driven by automobiles, aeronautics, infrastructure and mining. While recent years have also seen investment expansion over the ICT sector. The operators are seeking government procurement in Morocco to explore the young market. Government ICT contracts in Morocco are helping her to establish an internationally competitive position in the global market. Major Government ICT project initiatives in Morocco has been able to help her phase out a sizeable niche for itself in the recent years.

A range of major up gradation projects is being initiated in the transportation sector of Morocco. Along with public sector, the private sector is also set to gear up active participation in the investments in transportation. The country has seen, major procurement in road constructions, expansion, rehabilitations etc. Moreover, state authorities are floating tenders for up gradation of existing transportation projects as well as invitations to bid are being invited for Stalled transportation projects in Morocco. Government Transportation projects initiatives for Upgradation of Urban transport helping to boost connectivity and reduce congestion.  While large-scale ambitious aviation and maritime projects in Morocco are also in pipeline and will be going live in the years to come. The government has also planned projects to build 5 new ports in Morocco in the coming years.  As a result, major investments in transportation, industrial infrastructure and energy has boosted the country’s competitiveness and has established its position as a most favoured investment destination for global players.

The Egyptian economy is naturally fit for the manufacturing industries followed by oil and Gas. the large consumer base of 92 million is an essential element in the growth of the Egyptian textile industry. Egypt is also home to many energy-intensive industries like cement, steel. Petrochemicals and food. Private sector industries are mostly concentrated in food processing and FMCG sectors.

Though the manufacturing industry holds 16% of total industrial contribution to GDP Business opportunities from Egypt industrial sector is growing tremendously. Under its Economic reform initiative of 2016, the government has planned to go beyond manufacturing creating opportunities in the diversified sector. Such as oil and gas, real estate, retailing, tourism and agriculture. The government has been extending contracts, signing agreements with various authorities in order to drive investments into these sectors.

Recently, Kuwait Petroleum Corporation (KPC) and Egyptian General Petroleum Corporation (EGPC) have decided on the extension of two oil and gas contracts in Egypt to supply 1.5 billion tonnes of oil products. Similarly, multilateral financial institutions have been largely investing into the economy. The Government of Egypt has been successful in securing huge funding for various Government Projects in Egypt. Over last one year, the government has been able to secure funding for approximately 70-80 government Projects from funding agencies. Moreover, these institutions also undertake numerous initiatives through projects and Tenders in Egypt

Industry and Manufacturing being the mainstay in Egypt, apart from Ministry of Trade and Industry other government bodies are also actively participating in Procurement in Egypt. Procurement through Government Tenders in Egypt accounts for approximately 30-35%.  Call for tenders in Egypt from potential sectors have had an imperative impact on the growth of the economy. Invitation to bid for Government tenders in Egypt over the years have attracted myriad large and small investors to venture the market.

Egypt has earned its position as a major FDI destination for energy-intensive industries. For instance,  State electricity corporation of Egypt has forecasted to procure under International Competitive Bidding for construction and civil works for Helwan South Power Project by 2020. Similarly Egyptian Electricity Transmission company, Upper Egypt Electricity Production Company are actively inviting energy tenders in Egypt for international participation.

In the bid to boost the economic growth of the economy, Government of Egypt has been entering into numerous contracts with the private players to encourage them for participating in public tenders in Egypt. Telecom cluster has won a contract award in Egypt for the supply of Wind Power plant. ASEC CEMENT is a platform for investments in emerging cement markets in the Middle East and North Africa Region has won a contract award in Egypt to rehabilitate and manage the Muthanna Cement plant for 14 years.

Egypt industrial outlook features a compelling outlook for long-term investments, especially in the government sector. Government procurement in Egypt provides immense opportunities for the investors worldwide to mark their footprints into the emerging markets.   

Algeria remains the most lucrative yet the most challenging economies for the international Businesses. With the most recent announcement of Public spending initiative, the government of Algeria has decided to target the non-hydrocarbon sectors. Public contracts in Algeria have acknowledged imperative growth for long-term business prospects like the US and Europe. While the government is enthusiastic about the bringing in more foreign investments, opportunities are been diversified to other sectors apart from the mainstream.

The country being overly dependent on hydrocarbons exports, Government tenders in Algeria has been largely driven by other sectors like construction, pharmaceuticals, real estate and tourism. Financial institutions like UNDP, Eu, AFDB are constantly inviting tenders in Algeria to boost the economic growth. For instance, European union has recently called for ICB tender invitation in Algeria for procurement of technical assistance into local development. Moreover, the state government is also been actively driving procurement as per the need of the sector. State Ministry tenders in Algeria are prominent among agriculture, defence, education, vocational training etc sectors.

Algeria’s bright sectoral prospects offer immense business opportunities for international players. It has been seen that over the last few years large scale public contracts in Algeria has been awarded to foreign contractors.  The foreign companies established in Algeria has increased from 3 % i.e, from 810 into 1,008 in 2013. Moreover, regular deployment of Global Tenders from Algeria published by the authority on the portals are proving imperative to bring in investments.

Apart from investments government is also focusing on creating a suitable infrastructure to drive growth.  The government in its mission has planned 90 million$ investments into major infrastructure projects in Algeria.  The government plans to create 4 additional refineries in Algeria, financial measures are being taken in order to implement the projects. Moreover, the ministry of Energy has initiated 400mw of solar energy project in Algeria to be completed by 2018. Over the years private players are also being encouraged to participate in government projects in Algeria. For instance,  GICA, a Chinese equipment manufacturer has recently inked a project agreement to build a cement plant in Zahana by  2018.  Ministry of Energy and Mines has come up with a potential initiative of construction of a petrochemical plant

with an annual capacity of three million tonnes in Algeria by 2018. Looking at Algeria’s investment partners, the country has been thoughtful about going beyond the US and Europe. The government has also encouraged participation from emerging economies like Asia. according to the experienced shared by the companies that venture the market through government, tenders have reported double-digit growth in the market.

Algeria is the epitome of high reward economy, that can be flooded with potential foreign investments nearly in every sector. The government has been taking sustained and constant measures to make it a competitive economy in the coming years.

The Transportation Minister of Egypt Hesham Arafat has announced that the EIB funds will help them develop the first Cairo Metro line on the Helwan-Marg corridor.

                                          Cairo Metro line Projet, Egypt

As part of this project, establishment signs along the tracks and development of stations and infrastructure to convert the line from its existing mechanical system to a communications-based train control system have been envisioned.

The bank is also ready to help Egypt in its development of the first and second lines of Cairo Metro, apart from other supports, according to Arafat. The Minister has revealed that he has met a delegation of the EIB on 29th March 2017  and during this meeting, the European lender’s representatives have uttered their willingness to play a part in the development of the first and second lines, as well as to collaborate in the logistic spaces in 10th of Ramadan and 6th of October cities, support the Robeiky cargo line and help the investment division of the Transportation Ministry of Egypt.

Arafat has further said that their robust collaborative relation with the EIB is expected to support the phase three of the third line worth 600 million in total. The Minister has also stated that the bank is prepared to help for the establishment of the al-Raml tramway in Alexandria following its extension to Manshiya Square.

Arafat has uttered his delight over their productive ties with the EIB and stressed that they have now prioritised on boosting the capacity of the first line in a two-phase manner. The banks funding will cater to the half of the overall outlay of the project. ]]> https://www.africagateway.info/Blog/2017/04/eib-provides-500mn-fund-for-egypts-cairo-metro-project/feed/ 0 https://www.africagateway.info/Blog/2017/01/russia-to-lend-egypt-25-billion-to-build-nuclear-power-plant/ https://www.africagateway.info/Blog/2017/01/russia-to-lend-egypt-25-billion-to-build-nuclear-power-plant/#comments Tue, 17 Jan 2017 10:20:43 +0000 http://www.africagateway.info/Blog/?p=260 Egypt energy sector has recently become one of the most promising hubs and has been playing a promising role in the international markets. Egypt’s regional and international cooperations are the cornerstone of the country’s developing energy markets. Moreover, the country all the ingredients to become attractive energy partner. low cost of production, geographical proximity and welcoming foreign investment policies makes Eygpt an attractive destination for countries to expand their base in the country.

The government of Egypt has been undertaking large-scale energy projects in order to boost the sector. The government has recently awarded energy contracts to large international cooperations for expansion of the sector.  one of such deals has been signed recently with Russia over the establishment of nuclear power plant in Dabba.

Russia will be providing finance for building and operation of Nuclear Power Plant. Russia has agreed to invest 25bn$ in the construction of the nuclear plant that will have the capacity to produce 4,800MW of the nuclear energy. The loan will finance  85%  of the value of each contract for the work, services and equipment shipping, and remaining 15% will be financed by Egypt. In addition, Russian factories will be established in Egypt to manufacture nuclear plant components locally and transfer Russian expertise to Egypt. This project is one of the most significant national projects in Egypt. Similar government energy projects are being initiated on large scale. Egypt has been aiming to commission large-scale Renewable Energy projects that will further enhance the sub-sector growth. Government energy tenders are floated in areas of rehabilitation and installation of energy plants. Moreover, Government intervention through the regular deployment of energy tenders through e-procurement and government tender portals have been playing a vital role in the development of the energy sector. Moreover, in recent years Egypt has signed myriad Mou’s in the energy sector with other countries.  Enhancing country’s competitiveness International Energy tenders, Energy Bids, RFP, RFQ are being invited most importantly in the renewable energy sector for development and capacity building of the energy sector. Moreover, large international have acquired Contract awards from Egypt energy companies to support large energy projects. overall Egypt Energy sector

overall Egypt energy sector is under a crucial highlight as the sector provides immense business opportunities in the energy industry. Moreover, the country has a right mix of ingredients that makes it one of the most prominent energy investment destination.