Private funding key to assist government make NDP a reality - CNBC Africa

Private funding key to assist government make NDP a reality


by Tendai Dube 0

Private-public partnerships need to find ways to work together and explore how to make sure proposed projects actually happen. Photo: Flickr

Public-private partnerships need to find ways to work better and make sure proposed projects actually happen. This was argued during a National Development Plan discussion.

Edward Kieswetter, Group Chief Executive of Alexander Forbes thinks the challenge is in the amount of funding, therefore he believes government could work with the private sector to help with this.

"You have to ask the question, why would government fear bringing private sector ownership into a state owned enterprise, no one can pick the thing up and carry it away, it’s always going to be there,” said Kieswetter.

He explains how government has the ability to protect its own interests but can also balance those with private sector investors.

National Education Collaboration Trust CEO, Godwin Khoza believes it’s a transparency issue, especially in procurement since there are so many questions regarding the awarding of contracts.

"Greater inclusion of all stakeholders throughout the process, involve the public, involve civil society so that at the end of the day - it's not government defending it or the final awarding but there are other agencies and public players, like the public protector that can vouch for good governance.

Mohan Vivekanandan, Group Executive for Strategy at the Development Bank of Southern Africa thinks it is “crucial” to bring in private sector funding to allow the state to focus more on social, economic and infrastructural development.

“If you look at the numbers, the amount of money that the state is spending on infrastructure has started slowing down, it use to grow at almost 10 per cent per annum in the early part of this decade, it’s now pretty flat against a state the inflation is still running around 5, 6 per cent so in real terms it may actually be declining,” said Vivekanandan.

Vivekanandan says it is putting more of its efforts into the earlier stages around funding some of the pre-feasibility studies to get a project to bankability, hopefully at that stage their contribution might only be 10 per cent of the full capital requirement.

"It’s very risky but that is why there is the gap in that market and that’s then our role, we believe, as a development bank to go and step in, our figures show right now that maybe one in three or one in four of those projects come through to fruition,” said Vivekanandan.

Khoza adds the necessity to have social capital investment in order to sustain these ventures.

“I think from the NDP vision there should be some special programmes that are pinpointed for which procurement would be done differently and at best, the likes of the DBSA or special entities should be set up to drive those specific initiatives, otherwise procurement in the traditional way, slow or not the best way that government and the private sector would like it to happen, if there are special important programmes from the NDP then we have to have special provisions for procurement and funding of those.