Britam Asset Managers Chief Executive Kenneth Kaniu (centre), investment analyst Kelvin Mutahi (left) and senior analyst Brian Chege during the firm’s second quarterly media briefing in Nairobi yesterday. [Jonah Onyango, Standard]
East African governments have been urged to streamline Public-Private Partnerships (PPPs) laws to meet the region’s huge infrastructure budget deficit.
According to Britam Asset Managers Chief Executive Kenneth Kaniu, East Africa needs over $100 billion (Sh10.3 trillion) to fund infrastructure projects in the next four years and traditional sources of funding will not be enough.
Mr Kaniu yesterday urged the regional states to look beyond foreign aid, commercial loans and bonds if they were to realise their infrastructure goals.
“We have a funding gap of about $40 billion (Sh4.2 trillion) over the next four years and traditional sources of financing cannot be sufficient. PPPs can step in to plug the deficit,” he said at a press briefing in Nairobi.
Kelvin Mutahi, a senior investment analyst at Britam said Kenya, Uganda, Tanzania, Rwanda and Burundi currently have 58 active PPP projects worth $7.32 billion (Sh752 billion), but more needed to be done.
According to East African Community Vision 2050 plan, foreign aid is expected to be eliminated by 2050. Currently, foreign aid accounts for about $0.93 billion or Sh96 billions of funding in the region.
Brian Chege, also a senior analyst at Britam, said governments in the region must move swiftly to address the complex legislation that make it complex for private companies to get involved in infrastructural funding.
“For instance in Kenya, the PPP framework takes quite some time to develop. Private companies want a clear picture of what the cost and returns will be for any project they put in money,” he said.
Private firms can invest through equity, loan or debt financing to support infrastructure projects.
Complex laws governing pension funds and insurance companies, which together hold about $14 billion (Sh1.4 trillion) in their balance sheets, Mr Chege said, had made it difficult for them to fund infrastructure.