Roundtable – “Sharing economic growth in Africa”, Paris

CICA and the French Institute of International Legal Experts (IFEJI) organized in partnership with MEDEF International a high level roundtable attended by many African construction industry leaders and representatives of the legal profession and ministries.
The discussions particularly focused on:

  • the need of public services infrastructures;
  • the problems faced in low development countries;
  • lessons learned in the last 20 years;
  • the promotion of innovative Public – Private relationships to develop public services infrastructures thanks to the formulation of simple and inclusive good practices and policies as well as adapting the legal and institutional framework to develop projects and prevent disputes;
  • the presentation of the International Center of Excellence on Concessions and other PPP “Policies, Laws and Institutions” that CICA and IFEJI are promoting under the aegis of the United Nations (UNECE);
  • the conditions to attract investors and lenders to realize pipelines of Concessions and PPPs projects.

The main topic of this roundtable was the achievement of more infrastructure projects to support the development and a shared growth in Africa.

It is a vast subject but a challenging and motivating one. Obviously, this theme cannot be covered entirely in two hours of time. Nevertheless, we can trace the outlook, the strands of works and especially share the desire to go further together. The presentations by the speakers were meant to be short in order to preserve the maximum time for dialogue and exchange between the participants. In this regard, a cocktail was organized to prolong the informal discussions.

Increasing needs for insufficient funding

In Africa, the investment need is at least of USD 90MM per year for the next 15 years.
Half of these investments are missing and it is a paradox to observe that there are overabundant amounts of assets in search of allocation.

Why more failures than successes?

The public debt of donor countries has leapt and a deep change in paradigm has occurred.
A transfer of risks towards the private sector was observed.
As a result, it is of paramount importance to well-prepare the projects in order to mitigate the risks.
An obvious assessment is that it is not possible to set up the tendering process when projects are vague and incomplete. This would lead to abnormally high commercial fees for the contractors, useless studies, useless risks, delays, extra costs and disputes, and thus to the destruction of the optimum that the Public Authority should be ensuring.
First of all, the Public Contracting Authority should express clearly and in details: its needs, objectives, the features of the construction work or equipment ordered, the expected performances, the consideration of sustainable development criteria, the consideration of social needs, its expectations in terms of the level and quality of the local content, etc.

In this regard, Michel DÉMARRE (FNTP-SEFI) made a presentation to detail the concept of Well-Prepared Project.

The necessary financial contribution of the private sector implies to be aware of the limits of the “Project Finance” approach and develop a meticulous budgetary, macro and microeconomic approach allowing planning and prioritization.

It is needed to see beyond the sole bankability of the project. The project must be assessed in a larger framework taking into account not only the socioeconomic benefits but also other characteristics such as the specificities of the demand for sustainable public services delivered to the users and its evolution, the possible incomes, the dimensioning and the adaptation of the concession in the long time and the appreciation of the project’s impact on public finances. On these basis, it is possible to hierarchize to realize the infrastructure flow. Vincent PIRON (Piron Consulting) made a presentation on this theme.

Demonstrate the relevance and the socioeconomic utility of the infrastructure project

A recent study from the IMF concluded that a useful infrastructure investment has a neutral budgetary impact and often a positive impact on the public finances. There are existing tools and methods to calculate the socioeconomic benefits of an infrastructure but they are complex and insufficiently used. Yves LAFARGUE (COFINTER) made a presentation on this topic.

The cornerstone is the implementation of the best practices and a major improvement of the legal and financial framework

It is crucial to think about the ways and means to concretize the flow of balanced and sustainable projects in concession/PPP. The obstacles need to be identified and solutions appropriate for the specific situations on the ground should be provided. Marc FRILET (IFEJI) presented the solutions he learnt from his 5 years exchanges with African and international actors. The legal, institutional and contractual frameworks must be updated to allow the realization of the public services infrastructure necessary for the development of Africa and the well-being of its inhabitants.

A global, coordinated and structured approach is needed.

The sum of these works have convinced the United Nations (the UNECE) to create, in addition to the sectorial and national or regional centres of excellence, an international Centre of Excellence dedicated to Best practices, Institutions and Laws. This international Centre of Excellence will be extended to regional hubs, best suited for taking into consideration the legal, economic, social, cultural regional diversities.
The launch of the African platform of the Centre of Excellence “Concession/PPPs” will be characterized by an equal representation of the public and private sectors and by the essential participation of the African private sector.
Marc FRILET made a presentation on these aspects.
This roundtable was also an occasion to discuss professional training with a presentation made by Olivier DAMBRINE (CODIFOR).
This meeting should not be an isolated one. There must be a follow up leading to a roadmap and an agenda for future common works with the participants to this international meeting.

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