Private equity investors have always celebrated the investment opportunities in consumer goods, financial services and telecommunications – obvious strategic plays on Africa’s growth and emerging middle class. But, investors are growingly turning their interest to sectors once perceived as ‘the leftovers’ (or better left to government officials and donors). Investors look at the continent’s need particularly for roads, ports, and electrical grids and see an opportunity for big returns.

Africa’s infrastructure problem is not a new one, but rather it is an expanding problem, as more and more is required to keep up with the robust growth across the continent. Africa’s annual infrastructure needs are estimated at $93 billion – approximately 15 percent of Africa’s GDP – with $48 million of the current bill unfunded. African governments have historically financed a substantial share of the continent’s infrastructure on balance sheet, with local banks unable to supply the amount and tenor necessary for loans, consequently leaving many projects unfunded.

Yet, as debt capital markets gradually find their footing in African countries, governments are increasingly turning to public private partnerships (PPPs) to bridge the financing gap and deliver more efficient and cost-effective infrastructure. Examples of successful PPP infrastructure investments are generally limited to South Africa and Mauritius. But, as the list of examples progressively reach other parts of the continent, this article looks at the top African countries for PPP infrastructure investors.


Nigeria is now Africa’s largest economy. However, the ranking cannot overshadow its great infrastructural challenge.

Officials at the federal and state level concurrently identify PPPs as a strategic piece in addressing this issue, but governmental support does not necessarily mean an easy path. Political risk remains near high as the Nigerian legal and regulatory systems fine-tune the language that guides joint efforts between the federal government and regional states, such as Lagos State.

Lagos is the 7th fastest growing city in the world with a power deficit north of 2750 MW. Nigerian Finance Minister Ngozi Okonjo-Iweala pledged $1.5 billion in financing to the power sector in 2014, altogether part of the country’s goal to upgrade transmission capacity to 20,000MW by 2016.

Limiting the PPPs discussion to power in Nigeria would be a disservice by investors as the country’s GDP is expected to grow by more than 6.5 percent annually over the next two years, with growing opportunities in transport (ports, roads, rail), waste and sanitation, as well as social infrastructure (housing, education), especially as the Nigerian infrastructure deficit is measured at nearly $20 billion per year.



Tanzania is blessed with various natural resources, which makes it a favoured destination for foreign investment. The country is home to various minerals, including gold, diamonds and coal, but the sector has not witnessed expected growth. Furthermore Tanzania’s natural gas boom has, in part, been overshadowed by the one south to it in Mozambique and, in part, subdued by the country’s mass infrastructural challenges across all sectors. The country requires an estimated $6 – $8 billion to keep up with expected infrastructure needs through 2020.

Tanzania has enjoyed strong growth over the past decade, growing at nearly 7 percent between 2004 and 2013. The International Monetary Fund (IMF) estimates that the Tanzania’s economy could grow by 7 percent annually for the next few years. But, unless greater participation from private investors comes, infrastructural development, specifically with ports, airports, energy and rail, will fail to sustain IMF projections.

A change in the law and regulations, under the Finance Act 2014, should boost PPPs going forward. Unsolicited proposals under Tanzanian law, i.e. those initiated by the private sector, no longer need to be competitively tendered, which considerably encourages the private sector to engage the immense infrastructure pipeline in Tanzania with the freedom and confidence to choose from a better crop of construction and operating partners. The Tanzania Minister of Finance and Economic Affairs Saaada Salum has stated a keen interest to ensure that fees associated with off-take agreements, particularly with tolls and energy, are in line with the expectation of private investors.



Kenya is the bigger economy to the north of Tanzania that already has demonstrated interest and results in the PPP infrastructure space. Recent large scale projects in Kenya, including the Aga Khan Nairobi Hospital (2010), Olkaria III Geothermal Phase II Power Project (2009) and Expansion Project (2011), and the approximate $900 million Lake Turkana Wind Power Project (2014) is not only making it tangible and positive example for the East African community but also for sub-Saharan Africa.

Despite the recent successes, the country still requires an estimated $4 – $5 billion per year through 2020. An increasing need for affordable housing could also create a social infrastructural investment opportunity.

The Minister of Finance Henry Rotich estimates that the Kenyan economy will expand by 5.8 percent in 2014 with growth gradually reaching 7 percent in 2017. The current President of Kenya and former Minister of Finance Uhuru Kenyattta continually insists that the Kenya government will provide an “enabling environment” through a robust legal and institutional environment.

Recent PPP-focused laws help to address the lack of debt in the market through increased public debt and Kenyan government grants. The laws also ensure certainty throughout the process.

The government, in signaling high confidence in PPPs and its internal processes, estimates that 80 percent of its projects will be financed through PPPs by 2030.


Ghana is one of sub-Saharan Africa’s most vibrant and fastest growing economies, but the infrastructural deficit is hefty. Ghana’s Minister of Finance and Economic Planning, Seth Terkper insists that the country requires $1.5 billion annually to meet its infrastructure deficit. Other analysis suggests that deficit could approach $2.5 – $3.5 billion, especially if its economic growth matches the Minister’s predicted growth of 8 percent in 2014 and potentially approaching double digit by 2016 or 2017. Such figures requires major upgrades in Ghana’s transport network (ports, road, rails) and power grid to support its booming mining and other related extracting industries (oil, gas).

The Ghanaian legal and regulatory framework still has a long way to go, with the private sector too weak to support PPP. Nevertheless, a growing debt capital market will help ease that pain. Investors however remain worried by poor fee collection and cost overrun as seen in the power sector.

The government insists that a new PPP bill, apparently with increasing World Bank support, will address these current gaps in the process and other related problems. If the bill achieves all that the government promises, specifically in the sense of certainty, processes and rules, Ghana could become the second biggest PPP player in West Africa, only trailing Nigeria.

South Africa

South Africa may only be Africa’s 2nd largest economy now, but it remains a model for PPPs in sub-Saharan Africa. The Development Bank of South Africa, established more than 31 years ago, is wholly owned by the South African government and continues to finance and advise on infrastructure projects across southern Africa. The South African government had earlier estimated that infrastructure spending would reach ZAR1 trillion ($100 billion) by the time of the May election.

Yet a deficit remains, best characterized by the power shortfalls and load shedding during the recent months. A well-developed legal and regulatory system for PPPs should remain intact, despite private investor concerns in other sectors (especially mining). Estimates on how much South Africa requires in infrastructural spending over the next decade differ among analysts, but range from $4.5 billion to $8 billion. A continued national interest in renewable energy and addressing social infrastructural constraints (hospitals, affordable housing) also signify a continued bright future for PPPs in South Africa.

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