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

South Africa’s construction industry remains one of the economic engines of the country. Construction output in south Africa accounts for 48.2% of the total GDP, followed by Angola  at 12.9% Mozambique  and Zambia at 10.6% each. The construction industry continues to grow despite a slump in the economic growth. Despite these challenges, the industry’s long- term growth prospects looks positive with major new  investments in the coming year under the Government’s National Infrastructure plan.

With Rising new city projects, development of commercial space business opportunities across the construction and infrastructure poised to grow steadily. According to the Deloitte’s report on Construction trend in Africa, South Africa is ranked as the most preferred destination for construction investments. The country accounts for most of the construction project in the continent.

In total 85 of the infrastructure and construction projects in the continent are from South Africa.  Large construction projects in South Africa have a collective worth of 324 billion$. As a result government and other African companies are imperative to invest in the construction sector of South Africa. Across the sector, investments in real-estate accounts for 30% of the construction activity. Large increase in investments is also been  seen in Energy and power projects, transportation projects, mining and shipping projects, and  ports projects. Investments in Energy and power account for largest share followed by oil and gas sector.

Both Private and Public sector undertake construction activities in South Africa. However, the government is the largest financial investor in the construction sector. Government funded project to account for 60% of the market share. Whereas private sector accounts for 24% of the projects. The government is mostly undertaking civil engineering and construction work rather than the construction of residential and commercial complexes.

The emerging economies in the country seek financial assistance from developmental financial institutions to fund large projects. Therefore, Multilateral funding agency projects account for 10% of the total market share in the construction sector. Moreover, government tender notices are regularly deployed associated with the demand of the sector.

Industry development in South Africa is aimed at establishing an internationally competitive industry that enables government contracts with foreign contractors and consultants for the provision of technical assistance, feasibility study and provision of design and engineering services. Tendering opportunities for international/ private bidders are immense across e-commerce, transport and logistics segments. International tenders are floated to encourage foreign participation in the sector. Government invites competitive bidding, Rfp,RFQ to diversify ways of investments in the sector.

With the sector spilling growth Procurement opportunities from the construction sector are bound to surge with new investments flowing in the sector. However, the government is also taking steady steps to ensure that the industry remains vibrant.