" [1]The public and private sector in SA needs to make the investment environment attractive for investors so they can bring liquidity into local markets, says Johan Greyling, Africa infrastructure and projects director at audit firm KPMG.
Greyling was among speakers at the public private partnership (PPP) investment summit Africa on Tuesday.
Stability, certainty, well-structured PPP units, Greyling said, were some of the factors that would help make SA more attractive.
Greyling said liquidity had returned to the markets following the financial and economic crises but SA had to compete for it with other countries.
"We understand that we're competing globally for these investment funds," Greyling said. He said that there was plenty of liquidity in the market but investors were looking for "properly structured transactions."
PPPs were fast becoming a more "attractive" option in infrastructure development, according to Lucy Chege, divisional executive at the Development Bank of Southern Africa (DBSA).
Chege said investors looked for clear and fair procurement systems where PPPs were concerned, while governments increasingly wanted companies to involve local partners in transactions.
"It's important to work with local partners because really the sustainability of the deal will be at risk," Chege noted.
Adama Deen, head of infrastructure programmes at Nepad (New Partnership for Africa's Development), spoke of the challenges of infrastructure development on the continent. He identified the biggest hurdles as a need for policy reform, a lack of political will and administrative restrictions.
The role of the private sector in infrastructure development across the continent was also highlighted at the summit.
Stanley Kamau, head of PPPs in the Kenyan National Treasury said that the Kenyan government needed the help of the private sector to finance its US$40 billion funding shortfall on infrastructure.
The US$40 billion shortfall was over a five year period, from 2010 to 2015, and included the upgrading and expansion of ports, roads and railways.
Infrastructure was "critical" in pushing forward Kenya's vision for a 10% GDP growth every year for the next 20 years, Kamau said.
He added that government needed to work on infrastructural projects together with the private sector, as borrowing to finance the projects would only worsen the already strained government debt. Kenya's debt to GDP ratio was around 48%, Kamau said.
"We're trying to reduce the debt. Borrowing is not going to be a solution," said Kamau.
Kamau identified the lack of a clear PPP legal framework, a "poor level" of awareness on PPP initiatives within sectors of government and land acquisition, as some of the challenges to improving partnerships between government and the private sector.
PPPs eased pressure on national budgets, noted Karen Breytenbach, a senior project advisor with the PPP unit in the South African National Treasury.
"Government needs support, otherwise we will not get the infrastructure we need on the ground and create the jobs we need," she said.
Breytenbach also told the summit that "contract management" and monitoring was important to ensure that government received "value for money" from companies with which it entered into PPPs.
