Public-Private Partnerships Unlock Economic Opportunities Of AfCFTA In Transport, Logistics: DBSA

Development Bank of Southern Africa (DBSA) said public-private partnerships (PPPs) are important for unlocking economic opportunities of the African Continental Free Trade Area (AfCFTA) in the transport and logistics industry.

During a webinar hosted by the Department of Trade, Industry and Competition (the dtic) on Thursday, DBSA Senior Deal Originator Bongo Bacela explained that the collaboration between the public and private sectors play a vital role and cited the example of the Lobito Railway Corridor project.

"The Lobito Railway Corridor is a brownfield project, where the private sector identified the opportunity and partnered with the government," Bacela said, SA News reported.

The Lobito Corridor project entails making a 350-mile rail line in Zambia, connecting the southern part of the Democratic Republic of the Congo (DRC) and the northwestern part of Zambia. This line will connect regional and global markets via Angola's Port of Lobito.

The DBSA Senior Deal Originator said that Zambia "entered into a concession agreement because the State-owned enterprise that was running the line was struggling to run it in an efficient manner, so given the experience and the knowledge of the industry by the private sector, they entered into a concession agreement with government."

He added, "We believe that there will be economic opportunities that will be unlocked, traffic will be higher, both the DRC and Angola will benefit from a tax point of view. Jobs will be created and the whole world will benefit from the minerals that will be transported on the corridor."

Bacela noted that the bank is involved in such projects as it understands the need for regional integration to promote trade within the African continent to achieve developmental goals and improve economic activity.

He noted that the bank is looking forward to providing funding of up to $200 billion as it sees this move as an important corridor amid DRC mines producing minerals that need to be evacuated and exported to markets like China and the United States.

DBSA, a government-owned development finance institution, finances infrastructure projects in six sectors including transport and logistics, Information and Communication Technologies (ICT), water and sanitation; energy, social and housing.

"Government cannot succeed without the private sector and the private sector cannot succeed without government because governments will have to issue licenses and permits that are required for the private sector to operate the infrastructure," he added.