Market risks hold back PPPs - Consultant

Efforts at attracting public-private investments into critical sectors of the economy—specifically the dominant agriculture and environment sectors—are being negated by under-performance of the private sector due to persistent market constraints, a report by the United Nations University Institute for Natural Resources in Africa (UNU-INRA) has shown.

The perennial high inflation and financial market risks, coupled with unfavourable weather conditions like droughts and floods, were cited by survey respondents as the commonest risks to PPPs.

UNU-INRA’s Country Consultant, Richard Bonsi, presenting the report indicated that despite the adoption of mitigation measures to contain market risks, there are operational and market risks which remain key hindrances -- especially in the agricultural sector.

But he also mentioned that there were some significant gains as well: “In the agricultural sector, the research showed significant increases in employment, incomes and access to nutritious foods in project communities.

“There were also strong indication of technological improvements in beneficiary communities; especially in the area of mobile phone usage, the introduction of a prototype storage facility and adoption of waste collection bins.”

The research sought to open dialogues on how PPPs can be leveraged to transform key sectors of the national economy using the dominant agricultural sector and the environment as thematic areas. It also brought to the fore the need to create a favourable socio-economic and political environment that guards against market fragilities and other challenges.

The report encouraged more PPPs that will promote investments in the country’s agricultural and environmental sectors, which should be hinged on enforcement the various legal regimes so as to ensure the selection of appropriate financial models that will promote agriculture and the environment.

The national validation and dissemination workshop was aimed at discussing the project’s findings and open dialogue for maximising its policy impacts, in the interest of increasing economic gains from PPPs in key sectors of the economy.

The project was in line with implementation of a one-year research project titled ‘Improving the Development Outcomes of Public Private Partnerships in Agriculture and Environment’, and drew the attention of policymakers, researchers and related stakeholders to how PPPs can contribute to increased food security, social inclusion, and poverty reduction.

Although agriculture is a major growth opportunity in Africa for food security and poverty reduction, there are still fundamental challenges hindering its progress -- with the sector now requiring new levels of investments to unleash its potential to support socio-economic growth.