“The Value, Role, & Impact of Public-Private Partnerships in Africa"

FEEDS, FE3DS series

Remarks by Ambassador Robin Renee Sanders
International Affairs Advisor, AFRICARE
At
Robert H. Smith School of Business
Social Enterprise Symposium on Africa Public-Private Partnership Conference
University of Maryland
March 1, 2012

What is a Public-Private Partnership (PPP’s) and what value does this development paradigm have for Africa? Public-private partnerships (PPP’s) can take many forms, and can be projects and programs not just with the private sector. PPP's are one of the more innovative ways to address development, economic growth, unemployment and training (particularly for African youth, and women), and also can serve as a better mechanism to assist both African Small and Medium sized Enterprises (SME’s), as well as a more propitious way to engage the dynamic African Diaspora. Traditionally, PPP’s in general are defined as an agreement (Memorandum or Contractual) for resources (financial and human, or a mix) between private and public sector entities. Organizations like the National Council on Public Private Partnerships (NCPPP) says a PPP exists through an “agreement [when] the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public…including sharing the risks and rewards in the delivery of the service or facility.” (www.bit.ly/TNCPPP)

Although we are seeing a lot of improvements in the types of PPP’s, there remains a lot more room for improvement and creating non-traditional PPP's. For Africa, as long as donors have been in the development game there, many (not all) of the past development models have produced little-to-no sustainable success nor provided a lot of long-lasting results that fundamentally changed peoples’ lives and country challenges.

For Africa today, changing peoples' lives is so critical especially given the future demographics that are on horizon there. In using the year 2050 as a pivotal timeframe or value proposition year, let’s look at a few of the looming stats on Africa’s population and where the critical fault lines are, which will call for more and different types of development executed at a faster pace:

1. Africa will be the most populous Continent in the world, with a population of over 2.1 billion;

2. Youth workforce between the ages of 15-34 will be in excess of 1.1billion -- surpassing China and India’s workforce;

3. Between now and 2050, nearly 3 million new people become new entrants onto the Continent’s poverty matrix. (www.bit.ly/AFpop);

4. Africa will see its middle class continue to grow at a rate of 34.3% or more, possibly tripling its current 313 million middle classers. (www.bit.ly/Afmiddle);

Therefore What are the best development paradigms to assist the African public and private sectors, and its communities with these key demographic issues. PPP’s are a way to help, but we must get the right mix when creating them so they are not one-off wonders.

So let’s start with widening our PPP lens as to what a PPP is and be more creative about the players and the types.

Let’s Add Another P to the PPP Paradigm:

Innovation, Cutting-Edge Thinking, Adding New Players

Innovation – New partnerships need to be created, particularly with SMEs, MMEs (enterprises with less than 10 people), and the African Diaspora. A good example of this is the African Diaspora Market Place project, or ADM(www.bit.ly/AFdiaspora). ADM is a new partnership which includes NGOs, a U.S. private sector company and its foundation, and USAID focusing strictly on helping and providing grants to Diasporan SMEs.

Cutting-Edge Thinking – A number of creative programs are cropping up such as: the General Mills-USAID effort using PEPFAR-HIV/AIDS monies to increase capacity of African food companies(www.bit.ly/GenPep); International Finance Corporation’s (IFC) work with the Nigerian State of Cross River addressing hospital delivery services, and the International Fund for Agricultural Development’s (IFAD) work in Kenya on small farm holder horticulture projects (www.bit.ly/AF-IFAD).

Adding New Partners to the PPP Matrix - Stepping out of the traditional public-to-private sector framework, PPP’s today should and can look quite different. In fact we should be expanding the model more to include:

A.) Public Sector-to-Public Sector: Partnerships between in-country public sector entities or a public-to-public sector project where a cross-fertilization of budget resources among public sector entities can be used for a synergistic program. For example, Housing and Power Ministries could combine parts of their budgets to provide affordable, energy-efficient housing. In this case, the African public sector entities are both donor and stakeholder.

B.) Donor-to-African sub-sovereign: Donor partnerships that are directed to states/districts/parishes with in a country, or toward municipalities, or community governments – basically any governing body below Federal. Some donors are just beginning to look at this, particularly if there is good governance by local leadership.

C.) NGO-to-public sector: NGOs should begin to look more at working with any of the sub-sovereign public entities noted above, particularly in the area of community training – keeping in mind that partnerships also can include community in-kind contributions.

D.) NGOs-to-private sector: This is an area where Africare is leading the way as we have a number of private sector partnerships. Africare’s $1.5 million Coke Cola Company-funded South African HIV/AIDS clinic; our work with ExxonMobil to assist Chad women making shea butter; policy seminars with Chevron; and, a Benin water-sanitation project for schools with African vocalist Angelique Kojo, are just a few examples of innovative efforts, cutting-edge thinking, and adding new partners to the PPP paradigm.

What are the Positives of PPP and PPPP’s:

So maybe we need 4 P’s (PPPP) -- or a quadruple P -- instead of just three to describe these new kinds of partnerships, but what are the challenges to success? For success, the following elements are critical: the right mix of partners, risk-sharing, sufficient resources, agreed upon outcomes, leadership commitment, and above all stakeholder buy-in/contribution. What does this mean? Fundamentally, a positive outcome is unlikely if somewhere along the partnership link noted above there is (to use a common phrase differently) a value chain problem. For example my team in Nigeria and I moved some of our partnership efforts to the sub-sovereign level, meaning working with several of Nigeria’s states on specific sector development in both agriculture and education. In some cases we had great successes, and in others not because one or more of the links in the PPP value chain failed.

In the end, the partners have to believe in each other, know each other well, and be willing to make project adjustments as needed in order to move past the one-off wonders, and truly add more value and impact to the PPP development paradigm for Africa so that by 2050 sustainability can be achieved.

Signing A PPP Supporting Fulbright Program

June 12 - This evening the CEO and Managing Director of Bank PHB held a dinner in my honor at the Medici restaurant in downtown Lagos on Victoria Island. The CEO invited his most celebrated clients and friends and it was a lovely evening attend by some 30 people in a lovely resturant. I tend to want these events to have a purpose besides just a good meal and a wonderful atmosphere, so I suggested that we use the evening to formally sign our next Public Private Partnership (PPP) Memorandum of Understanding (MOU) agreement with Bank PHB. This MOU-PPP is the only one the U.S. Mission has with a Nigerian Bank that supports one of our premier education programs -- the Fulbright Program -- where Bank PHB funds one Fulbright Senior Scholar to study in the United States each year. The MOU was originally to be for three years, but during my remarks that evening, I highlighted President Obama's recent speech in Cairo on a new beginning for America. Thus, I suggested on the spot that as part of the President's new beginning and given that his inauguration was in January, 2009, we make the MOU-PPP for fours years to coincide with the inaugural year of the U.S President. This got a bit of a laugh by the esteemed group, and by the time I got back to my seat next to the PHB CEO he agreed to extend the MOU to four years. Now we can fund four instead of three Nigerian Senior Fulbrighters with the support of Bank PHB. We signed the MOU following my remarks and penned in the changes. It was a good night for the U.S. Mission, Bank PHB, and education in Nigeria!!

Ambassador Sanders' Remarks at Isaac Moghalu Foundation Leadership Lecture

Remarks of U.S. Ambassador Robin Reneé Sanders

Isaac Moghalu Foundation Leadership Lecture

Nigerian Institute of International Affairs
Lagos, April 23, 2008

All Protocols Duly Observed.

It is an honor for me to join you today for the inaugural Isaac Moghalu Foundation Leadership Lecture series. I understand that the Foundation's work is dedicated to promoting literacy and social change, and to investing in the development of human capacity in Nigeria. These are noble goals indeed. Achieving them is essential to the development of Nigeria. I welcome the opportunity to explore with you possible solutions to the challenges facing Nigeria and to share with you examples of how we are working in partnership with the Nigerian government, and business and civic leaders -- such as yourselves -- to promote a stable…prosperous… and democratic…Nigeria.

Poverty is perhaps…the greatest challenge facing Nigeria… today. The statistics are sobering. The impact on people’s lives is even more so. The 2003/2004 Nigeria Living Standards Survey (NLSS) conducted by the Nigerian National Bureau of Statistics -- with international technical assistance –documented…a national poverty rate of 54.4%. More than half of Nigerians…live on less than $1 per day. Subjectively, 75.5% of Nigerians regard themselves as poor, with most of those in the agricultural and informal sectors…particularly at the village levels.

So with that backdrop, we all recognize the starting point for poverty here in Nigeria, but what are we doing and what can we do to address this issue? To begin with, “investing in people” is the centerpiece…the pillar…of the United States’ partnership with Nigeria to alleviate poverty. We implement our programs in full support of…and in coordination with…either federal, state, or local governments, as well as civil society, NGOs and academics. We also applaud President Yar’Adua’s 7-point agenda, which…prioritizes wealth creation in the agricultural and solid minerals sectors, and raises the importance of food security, land reform, and education as poverty-fighting measures. I have organized the U.S. Mission’s strategic program goals and objectives to support this agenda under the “U.S. – Nigerian Framework for Partnership.”

We know that agricultural development, improved education, income generation, empowerment of women and health care are the foundations of any nation that must be nurtured…and cared for. They have not been for a long time in Nigeria. That is why our programs throughout Nigeria…support sustainable agricultural development and food security as critical factors in poverty alleviation.

In fact, in April 2008, President Bush announced $200 million to address the recent food security issues in Africa. Let me also share a few additional examples of not only what we are doing but also creative solutions by Nigerians that I have witnessed firsthand. For example, the U.S. Mission through the U.S. Agency for International Development is increasing cassava yields and agricultural incomes for 300,000 farm households in 11 South East and South South states, creating 60,000 new jobs in cassava processing, manufacturing and trading. Our Foreign Agricultural Service is funding community health, microfinance and rural infrastructure projects in Bauchi, Benue, Kaduna and Nassarawa States. Additionally we are active in bore hole and school rehabilitation projects through our office of Defense Cooperation. Public Diplomacy efforts are too focused on poverty reduction through its education, IT training centers, American Corners and exchange programs.

In addition, we have reached an additional 500,000 farm households in the north, middle belt and southern areas to increase productivity and income generation for selected domestic export products – such as marine and freshwater aquaculture and dairy production. We have also worked on sustainable tree crop development with cocoa and cashew.

In our work with the private sector under the umbrella of public-private partnerships (known as PPP’s), we have established partial loan guarantee programs with commercial banks to provide more than $30 million in credit to small and medium size enterprises and agribusinesses so that increased agriculture yields reach markets efficiently -- benefiting both farmers and consumers. And in the spirit of PPP’s, we have worked with companies like Microsoft with educationally focused NGOs like LEAP Africa and with Nigeria’s dynamic banking sector with leading entities like Bank PHB and Skye Bank on an export credit program.

Supporting education…is also critical to alleviating poverty. There are…thirty million primary school children in Nigeria…yet as many as half of these…do not attend primary school. An enormous number of out-of-school children and young adults…possess limited literacy and numeracy skills…and have little hope…of ever joining the formal workforce. Creative-thinking in programs like President Yar’Adua’s village solutions project called COP under his National Anti-Poverty Eradication Program (NAPEP) are also using synergistic approaches to addressing poverty – linking agricultural, education, income – generation and micro finance on one platform, which is truly transforming at changing people’s lives.

Let’s look a bit more specifically…at education. Regional gender disparities in school attendance and literacy deficiencies are enormous. In the North West…the proportion of girls who attend primary school stands at 34 percent, compared with 85 percent in the South West. Adult women in the North West only have…a 20 percent literacy rate. We have all heard the same words over the years in different forms but in essence they all mean the same thing…that to educate a girl or woman is to help educate a village…a community…a nation, and for Nigeria this is no less important.

Under our African Education Initiative, the U.S. Mission here is making a difference by increasing literacy and numeracy skills for 700,000 primary school children in three states and training 15,000 primary school teachers in classroom instructional methods. We will launch a new basic education initiative in four northern states beginning in late 2008 that will reach approximately one million pupils and 9,000 teachers in 1,500 schools.

As I have traveled around Nigeria, I have seen wonderful programs by Nigerians on education in states like Bauchi, Kano, Cross Rivers, Delta and Rivers states. For example, Bauchi State supports a training center that teaches entrepreneurial and IT skills as well as a secondary school exchange programs with Iowa State University. Delta State has begun to reach out to communities to conduct job skills training for youth as well.

As we all know, access to health care is another critical factor in alleviating poverty, and the United States is investing heavily in the development of Nigeria's health care sector. Our programs…for example…are building the skills of 15,000 health care workers, preventing malaria…treating tuberculosis…administering life-saving childhood immunizations…and providing family planning and reproductive health counseling.

Focusing now on HIV/AIDS…Nigeria has the third-largest number of people…living with HIV/AIDS…in the world, with an estimated 4.4 %...of the Nigerian population living with the virus. To address this critical human health need, Nigeria is one of 15 focus countries under the U.S. President’s Emergency Plan for AIDS Relief (known as “PEPFAR”). During PEPFAR's first four years, Nigeria has received nearly $650 million dollars to strengthen HIV/AIDS prevention, treatment, care and training throughout the country with a focus on orphans and vulnerable children, and home-based care. More than 80% of patients on antiretroviral drugs in Nigeria are supported by the U.S. Government under its PEPFAR program.

Looking at issues…from education…to health care…to agricultural development…, Nigeria's human development needs…are daunting. U.S. development and Nigerian programs are helping to address these needs, but more importantly efforts are focused on providing practical…proven programs that can be replicated throughout Nigeria by the Nigerian government and in tandem with other international donors and civil society. The role and importance of civil society groups with capacity and training in all of these issues – health, education, and agricultural development – cannot be stressed enough.

These programs do not exist and cannot operate in a vacuum, as there must be standards of governance prevailing throughout Nigeria for poverty alleviation programs to thrive. Good governance…democratic institutions…and respect for the rule of law provide the enabling environment in which Nigeria can better use our assistance as well as the assistance of others through the creative solutions I have highlighted. It goes without saying that...promoting just and democratic governance…in Nigeria…is a core pillar of the United States government’s partnership with Nigeria.

We all recognize the flaws in the 2007 election process, however, since then President Yar'Adua has pledged a new commitment to the rule of law…a new commitment to respect the independence of the National Assembly and the courts…and a renewed commitment to anti-corruption efforts. Some judges and legislators have responded by demonstrating unprecedented independence. Electoral tribunals which had, in the past, merely rubber-stamped rigged elections, are now overturning some of the most egregiously flawed election results. Anti-corruption institutions are now challenging the culture of impunity by investigating powerful political figures in all sectors. Now even more remains to be done on all of these fronts.

Corruption, especially systemic corruption, is among the most powerful forces undermining good governance and poverty alleviation in Nigeria as it siphons financial resources, and creates barriers to investment, commercial activity, economic growth and most importantly, to development.

The impact of corruption touches each and every Nigerian, and robs each and every Nigerian everyday of a better future. A recent World Bank Institute Report (Dec 2006, released in 2007 on corruption in Nigeria) noted that…an improvement in institutional quality from current levels to those found in other places like Chile, for example, would translate into a seven-fold increase in per capita income in Nigeria over the long run. According to the World Bank, one standard deviation increase in corruption lowers investment rates by three percentage points, and the average annual growth of a country by one percentage point.

There is reason to hope that the climate of corruption is changing. The Government of Nigeria has made considerable strides in the fight against corruption. We are working with key institutions like the Economic and Financial Crimes Commission, ICPC, the Civil Service Federation and others in order to partner with the government, National Assembly, and civil society in their anti-corruption efforts. For example, we are funding financial crime advisors to help improve the operations of the Nigerian Financial Intelligence Unit, providing equipment to NDLEA – Nigeria’s Drug Agency, and have plans underway to enhance the professionalism and strengthen the Nigerian Police Force (NPF) through basic police recruitment programs, training of academy instructors and training of senior management in the NPF.

The political space opened up by President Yar'Adua has allowed us to provide comprehensive skills training to recently-elected members of the Nigerian National Assembly, its committees, and staff. In addition we will support Nigeria’s efforts on election reform, including pushing for a truly independent electoral commission – because the one in place now is not living up to that need. The Niger Delta needs special note as the problems and development challenges there - coupled with criminality - presents additional rungs in the poverty ladder. We are working with numerous civil society groups funding projects on agriculture, income generation, job skills and IT in the region.

This backdrop has clearly shown the relationship among poverty…governance, and corruption. But…it has also noted…where innovative solutions of government, the U.S. Government, civil society and the people of Nigeria are linked up to address these issues. I have a friend who always says that “poverty is a state of being, not a state of mind.” And these examples of innovation underscore this point as villages, communities, government, and active partners like the U.S. seek to improve the roadmap of Nigeria’s future.

Policy can make strides in the right direction. Nigerians know what must be done to craft a new roadmap of direction for the country… but it will not be easy…nor painless. It will require…demonstrated, sustained…committed support to the principles of democracy, good governance and the rule of law. It will require all – the government, businesses, civic leaders, but more importantly…the people of Nigeria…to stand up firm…for these issues, …to stand up firm against corruption whenever, and wherever it raises its ugly head. Be it fighting corruption or disease…or supporting democracy…and good governance…the United States is a steadfast friend, steadfast partner, and a steadfast ally of the Nigerian people in the fight against poverty here in Nigeria and elsewhere.

Thank you.