AFRICA: ECOWAS Region PPP Framework Review and Harmonization
COVID-19 is having a devastating economic impact in West Africa, exacerbated by a lack of investment funding for infrastructure. Governments in the Economic Community of West African States (ECOWAS) are looking for a regional solution to infrastructure development. The private sector is an increasingly important source of infrastructure finance for ECOWAS, but at present represents only 5 percent of infrastructure financing within the region. To encourage increased PSP, ECOWAS, with support from PPIAF, has established a regional framework for PPPs.
ECOWAS consists of 15 member countries—Benin, Burkina Faso, Cabo Verde, Côte d’Ivoire, Gambia, Ghana, Guinea, Guinea Bissau, Mali, Liberia, Niger, Nigeria, Senegal, Sierra Leone, and Togo. The World Bank classifies 15 member states as low and middle-income and four as fragile countries.
Infrastructure gaps of ECOWAS economies vary widely. For example, Nigeria, which has the biggest economy in Africa, has an infrastructure investment gap of $221 billion, equivalent to 51 percent of GDP. In contrast, Cote d’Ivoire’s infrastructure investment gap stands at $14 billion, equal to 23 percent of its GDP.
The region has suffered from underdeveloped transport infrastructure and poor physical and digital connectivity, hindering intra-regional trade, and constraining economic growth. The strategy document, ECOWAS 2050 Vision, outlines the region’s goals of building an integrated community in a prosperous region with strong institutions and working towards inclusive and sustainable development through the establishment of free trade, a common market, and infrastructure development. In this context, the ECOWAS Commission has identified PPPs as a means to close the infrastructure gap and kickstart social and economic development.
The ECOWAS Commission requested World Bank support to assess regional infrastructure priorities and harmonize the PPP framework. Through a standardized diagnostic on infrastructure connectivity constraints, the World Bank’s Infrastructure Sector Assessment Program concluded that many ECOWAS countries lack fully operational legal and institutional frameworks to support PPPs. These shortcomings are accentuated by poor coordination at the regional level.
To address these limitations, PPIAF supported ECOW-AS in reviewing gaps in existing country members’ regulations and in successfully developing a comprehensive regional PPP framework. This is a critical first step in enabling inter-country projects to be financed by the private sector, in line with the PPIAF objective to accelerate PPI program development as outlined within the second pillar of PPIAF’s 2023–2027 Renew Strategy.
The PPIAF activity consisted of reviewing gaps in existing PPP laws and regulations at both the regional and national levels, which revealed the need for harmonization of member country frameworks, especially in regard to the fiscal management of PPPs. PPIAF also supported the establishment of the roles and responsibilities for preparing and implementing regional PPP projects to further improve coordination between member countries. Additionally, to build the capacity of PPP practitioners, PPIAF provided PPP certification training to officials from the ECOWAS Commission, its agencies, and member states.
ECOWAS’s Commission is strongly committed to support countries in the adoption of PPIAF’s recommendations to improve and harmonize member countries’ legal and institutional frameworks in line with ECOW-AS’ regional policy and guidelines. ECOWAS country members approved the framework in September 2021. The framework was presented to the ECOWAS Parliament, Council, and heads of state, who approved resolutions on regional PPPs and associated guidelines in December 2021. This new regional framework will facilitate delivering infrastructure and public services in the ECOWAS region, in turn contributing to growth and development in all member states.