Barclays urges councils to explore PPPs
Isaac Pinielo | Tuesday June 23, 2015 14:54
Recently, the bank entered into a partnership with the Botswana Association of Local Authorities (BALA) with the intention to unlock investment opportunities and improve service delivery.
Speaking on the sidelines of the 2015 Commonwealth Local Government Forum (CLGF) in Gaborone last week, Barclays Africa head of public sector, Zienzi Musamirapamwe said it is imperative for the local government and the private sector to strategically collaborate in the delivery of sustainable development goals (SDGs).
She noted that local government is facing a number of challenges in addition to delivery of SDGs. “In view of the rapid urbanisation trend, more people coming into cities in pursuit of economic opportunities, local government will need to provide infrastructure including housing, power, transport, schools and hospitals,” she said.
According to Musamirapamwe, there is now an infrastructure investment gap, which cannot be closed by the local government alone.
She said the local government would need to create space and attract the private sector to actively participate in the delivery of SDGs including addressing the infrastructure gap.
“We, at Barclays believe that when ambitions change lives, we all prosper and we are here to help our clients achieve their ambitions (in) the right way,” she said. Asked if Barclays Africa has a strategic goal to look at more cost effective financing specifically for PPPs, Musamirapamwe said it is important to explore alternative sources of funding including PPPs and municipal bonds.
On the municipal bonds, she stated that there is a need for an aggregated municipal bond approach, instead of councils going to market as individuals. “An aggregated municipal bond approach presents economies of scale, resulting in lower cost of funding,” she explained.
She further indicated that capacity needs to be built to enable local authorities to deeply understand and negotiate with knowledge the PPP legal contracts being signed including an able performance monitoring.
She said Barclays Africa has been involved in a number of PPPs projects including the rapid bus transport fare collection system for a city in South Africa and water PPP project. Musamirapamwe also highlighted the importance of domestic resource mobilisation for councils, noting that efficient revenue collection systems are key. She said Barclays has implemented integrated revenue collection systems for councils and that it will continue to do so in present markets working together with local government.
She said there are opportunities that the bank is currently exploring throughout Africa including working with councils to address the infrastructure gap as well as revenue collection efficiency. “We have developed a Public Sector Vision 2020 that we are pursuing and this includes local government,” said Musamirapamwe. In the meantime, the bank held a panel discussion last week at the GICC focused on the topic, “Partnering with the Private Sector to Promote Economic Growth”.
The purpose of the panel discussion was to look at opportunities to partner with the private sector in the successful implementation of the SDGs.