Harness Public-Private Partnerships To Finance Development


viagra order geneva; font-size: small; line-height: 150%;”> geneva; font-size: small;”>The role of the private sector in wider social economic transformation is now self-evident.

We now know that enduring investments in transformation enablers like skilled and nimble human resources, railways, energy, roads, ICTs and agriculture, can be easily leveraged through joint ventures between Africa’s Private and Public Sectors. This is what Public Private Partnerships (PPPs) is all about.

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The fierce urgency of the above investments necessary to guarantee jobs, create an efficient and competitive private sector and dramatically transform the African continent need no emphasis. In this article, I focus on energy security.

Energy security: Africa’s population growth is at 2.4 percent per annum, meaning that every day; there are more energy needs. According to International Energy Agency, the average electricity consumption per capita for Africa in 2013 was estimated at a paltry 578 kWh.

The foregoing is merely a quarter of the world average estimated at 2752 kWh per capita and a fourteenth of the Organization for Economic Co-operation and Development (OECD) average estimated at 8477kWh per capita. Needless to say, the African Average is not equally distributed as countries like South Africa have a high consumption rate estimated at 5013kWh per capita.

For African countries to reach middle level country classification (like Malaysia), on average Africa should increase its electricity consumption per capita by over 3000kWh which translates into 900,000MW.

It is imperative to note that countries with higher electricity consumption per capita also have higher GDP per capita and resultant population welfare. Africa must also diversify the current energy sources to meet the required demand, with the cleanest source being hydro power.

The hydro power potential is estimated at 300,000 MW. The geothermal potential is estimated to be 14000 MW. The Afrec Report of 2008 estimated Africa’s natural gas reserves at 14.4 trillion cubic meters.

This leaves a deficit of about 600,000 MW to be met from other sources such as wind, solar energy and nuclear energy. Nuclear Energy is also an option for lighting and powering Africa as long as compliance with international norms and standards are adhered to.

From the foregoing, Africa’s governments and private sector must move away from bureaucratic shenanigans and leverage local and foreign capital to invest in Energy. Africa cannot talk about industrialization without out resolving its deepening energy crisis.

Africa needs a practical contributory Energy fund to help create a future energy pool and guarantee energy independence for the continent.

For example, despite all the positive developments in energy sector, Uganda’s electricity sector is still small. Uganda’s installed capacity at 830 MW-only approximately half of Kenya’s 1600MW and Tanzania’s 1,509.85 MW. Uganda’s peak demand at 500 MW is only a third of Kenya’s 1500 MW and half of Tanzania’s 100MW (PSFU 2014).

Uganda’s Private sector is also concerned about energy pricing. Poor Energy pricing renders Uganda’s products and services uncompetitive. The market is being given away to products from very low energy cost stream countries like China, India, Egypt and South Africa.

Energy as part of overall production costs in Uganda ranges from 10-65 percent compared to 2-5 percent in highly competitive low cost stream energy countries. In the confectionary sector energy composition of total costs is at 10 percent compared to that of India which is at 4 percent.

Uganda’s electricity costs 16 USD cents /KWH compared to production sources that compete in Uganda’s market like China, India, Egypt and South Africa at 2-6 USD cents/KWH. Uganda’s biscuit manufactures say that imported products from India landed in Kampala costs 6.5 USD/kg while that from Uganda is about 9.5 USD/kg. This means that the foreign product is 2.5 USD/kg cheaper despite the transport and tax related costs.

A comparative analysis from Economic Policy Research Center shows that Uganda’s electricity prices are not the highest in the region; the highest prices are in Kenya.

However, Uganda’s prices are significantly higher than those in Tanzania. The paradox is that, Kenya with its high prices has the most competitive industrial sector in the region.

This is because industrialists primarily focus on availability than cost (PSFU survey 2014). It is therefore clear- that the primary objective for Uganda government and private sector should be to ensure stable supply of power.

Morrison Rwakakamba

Chief Executive Officer- Agency for Transformation,


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