By Groum Abate
African governments must improve project preparation, deepen capital markets and adopt new financing models if public-private partnerships are to expand access to affordable education, health care, housing, water and energy, officials said at a continental forum in Addis Ababa.
The Second Forum for Public-Private Partnership Units in Africa was held under the theme, “Making Social Sector PPPs Work: From Policy Ambition to Effective Service Delivery.” The two-day hybrid event was co-organised by the United Nations Economic Commission for Africa (ECA), the African Development Bank (AfDB) and the African Legal Support Facility (ALSF).
The forum brought together government officials, PPP specialists, development-finance institutions and legal experts to discuss how private capital can support essential public services without placing unsustainable costs on governments or households.
It builds on the first PPP Units Forum, held in 2024, which focused on climate-resilient infrastructure and convened more than 30 PPP units from across the continent.
This year’s discussions focused on social sectors, where conventional PPP structures can be more difficult to apply. Unlike toll roads, ports, airports or some energy projects, investments in public health, education, affordable housing, sanitation and water supply may not generate enough revenue from user fees to attract private investors on their own.
This leaves governments with a difficult task: finding ways to secure private finance and expertise while ensuring that essential services remain affordable, accessible and fiscally sustainable.
Hanan Morsy, ECA’s Deputy Executive Secretary for Programme, said social-sector PPPs should not be assessed solely by the amount of capital they mobilise.
“Success means services that are accessible, affordable and sustainable, and that genuinely improve people’s lives,” Morsy told delegates. She said strong project preparation and effective partnerships were essential to turn policy ambition into practical results.
Robert Lisinge, Chief of the Energy, Infrastructure and Services Section in ECA’s Private Sector Development and Finance Division, said Africa’s infrastructure shortage includes both economic and social infrastructure.
The continent needs roads, railways, airports and ports to support economic activity, but it also needs reliable electricity, water, schools and health facilities.
“Private investment can be easier to attract in economic infrastructure because there is often a clear path for investors to recover their money,” Lisinge told Capital.
“With a toll road, for example, users may be willing and able to pay for the service. But social infrastructure is different. It can be difficult for communities to pay the full cost of water, electricity, health care or education.”
If the private sector participates in social-service delivery, it must still recover its investment. The core challenge, Lisinge said, is balancing private-sector profitability with the ability of communities to afford services.
Governments are therefore considering mechanisms such as availability payments, in which public authorities pay private operators according to service performance; viability-gap funding; targeted subsidies; concessional finance; and blended-finance arrangements.
Lisinge said a sound financial environment is central to attracting private investment. Developers need access to long-term finance through capital markets, bonds and other instruments.
“Governments do not have enough money to meet all the services their populations require,” he said. “But even when the private sector comes in, it needs somewhere to obtain financing.”
He said governments also need stronger technical ownership of projects. Ministries responsible for education, health, water and energy must have the expertise to identify priorities, prepare projects, conduct feasibility studies, negotiate contracts and manage long-term partnerships.
“Governments may have the vision and the will to pursue PPPs, but that does not always translate into ownership at the technical level,” Lisinge said.
He pointed to Kenya’s project-preparation fund as an encouraging example of the kind of support that can help projects move from ideas to investment-ready transactions.
Olivier Pognon, Director of the African Legal Support Facility, said African governments require strong legal and financial advice when negotiating complex contracts with private companies.
“The facility was designed as an instrument to provide certainty to African governments when it comes to negotiating complex commercial transactions,” Pognon said.
He said the ALSF assists governments in areas ranging from mining licences and independent power-producer agreements to debt restructuring and infrastructure transactions.
The facility provides transaction advisory services, often combining internal specialists with external law firms. It can support governments from project feasibility and structuring through to financial close and implementation.
The ALSF also offers model contracts, toolkits, handbooks, thematic guides and online training through the ALSF Academy.
Pognon said this year’s focus on housing, health care and education reflects the fact that private capital does not naturally flow into many social sectors.
“Affordability is an issue when you talk about health or education,” he said. “But if private capital is needed, return on investment is also a consideration. The question is how to reconcile these two seemingly contradictory requirements.”
Many African governments face mounting debt-service obligations, limited fiscal space and large infrastructure gaps. PPPs can help mobilise additional capital and technical expertise, but officials stressed that they are not a substitute for government responsibility.
Public institutions must retain the ability to regulate service quality, monitor contracts, protect users and manage long-term fiscal commitments.
The Addis Ababa forum examined risk allocation, financing mechanisms, community-level PPP models, contract management and monitoring systems. Participants also worked through country-level cases during technical project clinics.
The organisers said the forum would produce an action-oriented follow-up framework, with participating countries appointing focal points to monitor progress and take part in future peer exchanges.
The central question remains whether Africa can develop PPP models that attract patient private capital while protecting the public purpose of essential services. The answer will depend on strong institutions, transparent contracts, realistic financing and a firm commitment to affordability.