Jean R. AbiNader
December 11, 2018
In the second edition of the Public Private Partnerships (PPPs) Forum in Africa, held in Casablanca, business leaders, investors, experts, and government officials discussed means to improve the use of PPPs in Africa for small and medium-sized enterprises. Although the structure and format of PPPs are not a recent innovation, conditions in Africa have held back their utilization due to lack of sufficient regulations and an ecosystem that promotes their adoption for projects of various sizes. Given the significant amount of investments needed in Africa for infrastructure, building industries in many sectors, and taking advantage of its human resources, “PPPs are now fashionable in Africa as evidenced by the series of contracts signed by several governments and private partners, and despite some hiccups encountered by some projects, the prospects are most promising for investors, as the opportunities are immense,” according to an article in La Tribune Afrique.
With the ever-increasing international and regional experience in PPPs, participants in the Forum discussed strategies to make PPPs successful under the theme “Promoting ICTs and Agriculture through PPPs.” Specifically, participants focused on “ways and means for African countries to take full advantage of the opportunities offered by these partnerships, particularly for Africa’s growing and priority sectors of agriculture and ICT.”
Daouda Coulibaly, whose firm organized the event, believes that PPPs in agriculture have the potential to change the sector by applying supply chain concepts using a ‘seed to market’ framework for assessing project opportunities. Since Africa has made food security a priority, which includes building options for the participation of small farmers, new strategies are required to succeed in global markets. This is where PPP integrating the international expertise of agri-industry, with local production supported by governments, can make a competitive difference.
As Coulibaly noted, “We are convinced that the private sector can help finance the transformation of Africa and the industrialization of its agricultural sector, particularly through PPP contracts.” He made the caveat that PPP must be part of a “coherent political vision of development…a tool in the service of a project of public interest.”
Special mention was made of Morocco, “with its many years of experience in the conduct of agricultural PPPs” as an example of how governments can provide an environment “conducive to the emergence of genuine PPP ecosystems in their countries.” And Mohamed Methqal, the director general of the Moroccan Agency for International Cooperation (AMCI), stressed that “the success of the PPP formula requires a multiplication of actors, which is likely to boost employment and boost the economy ” As part of the forum, participants visited the “Technopark of Casablanca, a model of a successful technological hub in Africa,” as well as an immersion in a Moroccan agricultural company, where an irrigated area is being done in PPP mode.”
Xavier Reille, director of the Maghreb office of the International Finance Corporation (IFC), believes it is important for the continent to develop model PPPs, which will allow projects to be developed with a very high success rate to illustrate their value and the quality, which he says is “an effective way to further fuel the appetite of international investors.”
Algeria and China will soon launch a $6 billion integrated megaproject for phosphate mining. Sonatrach and CITIC, the Chinese Construction company, recently signed a partnership agreement that will enable Algeria to further diversify its economy, which is highly dependent on hydrocarbon exports. Asmidal and Manal are two other shareholders making up the 51% Algerian ownership. Construction is slated for early 2019 with production to begin in 2022.
Given that its neighbor, Morocco, is the world leader in phosphate exports, Algeria will need Chinese expertise in opening markets in Asia and other parts of Africa. According to Sonatrach, the project will allow Algeria to increase its phosphate production to 10 million tons per year. The production goal is 6 million tons of phosphate and 1.1 million tons of ammonia per year, creating some 14,600 jobs. “Algeria would be able to export the equivalent of $2 billion worth of fertilizer every year and gradually increase its reserves of phosphate and natural gas.”
Morocco’s total phosphates production reached nearly 32 million tons last year, and the country holds about 73% of total world reserves. Tunisia on the other hand has been working on implementing projects to increase annual phosphate production by 30% to around 5 million tons, which is still below the 8 million tons produced in 2010. The global market has become quite competitive and it will be challenging to see how the various competitors garner market share.
Shopping malls abound in Africa according to a report by market intelligence firm Sagaci Research, with the total more than doubling over the past eight years, driven by urbanization, a growing middle class, the impact of international retailers, changing consumer lifestyles, and rising household incomes. The numbers are amazing, particularly when compared to stereotypes of African underdevelopment.
“Today, Africa boasts 579 malls, up from 225 in 2010, with Egypt having the highest number at 106, followed by Kenya with 66, and Nigeria with 53. “While malls were once largely confined to Africa’s largest cities, they are now proliferating in smaller urban centers,” says the sixth edition of the Shopping Malls in Africareport.
As in more mature markets, developers are designing malls as leisure time destinations, not just shopping venues. “Mall of Egypt is ranked as the leading mall in Africa, with another five malls all located in North Africa also attaining a grading of AAA,” including the Morocco Mall in Casablanca.
According to the report, new mall development in Africa is currently concentrated in countries that already have a significant number of malls, particularly Egypt, Nigeria, Kenya, Morocco, and Zambia. In the AA grading of malls, Morocco boasts five in the top 15, including AlMazar, Ibn Battouta, Borj Fez, Anfa Place, and Socco Alto.