A paper presented by Prof. A. D. Badaiki at the African Bar Association (AFBA) yearly conference in Nairobi, Kenya
- Continued from yesterday
Recommendations
Lawyers should build up their capacity through training in project financing and infra-structure development laws, policies and practices. This will keep them abreast with accurate and acceptable draftsmanship style of adopting project financing and ppp contracts to applicable laws depending on the contract and allocation and overcome the risk of drafting terms and conditions which may not be enforceable by law. To this end, lawyers should be properly guided by the guiding laws, model international trade laws such as the UNCITRAL Model Laws and ICSID Rules developed by some international organisations, project finance lawyers, project financiers and consultants. Lawyers should also be guided by some model contracts that have been developed overtime and in use in the international business world. The idea is not to copy them, but adopt them as a guide with variations as the need arises. Simplicity, clarity and effective communication and not ambiguity or circumlocution should be the hallmark of a proactive well-informed legal draftsman in project finance contract.
Project lawyers should imbibe the values of travel and thrive on travel, relish the subtleties of cultural differences and enjoy learning new language. Cross-cultural skills as well as sound legal and commercial judgment are needed by lawyers.
Project preparation and project development should be given greater focus. Experts should be employed in this regard.
There should be adequate training for legal draftsmen involved in project finance contract.
Every African country should carry out a survey of infrastructural facilities needed in her country and come up with National Infrastructural Policy and Master Plan for urgent implementation including financing and new models of ppp arrangement.
African nations without ppp legislation should enact same. Those who already have such enactments should review them from time to time to improve on strengthen ppp provisions and the institutional frameworks by provisions that would expand the scope of responsibilities of respective infrastructural regulatory commissions and guarantee a workable degree of their autonomy.
There should be collaboration between relevant institutions responsible for infrastructural development without extenuating the autonomy of such institutions and within the framework of government public administration. In Nigeria, for example, there is the need for collaboration between the interaction is inevitable in infrastructural development. Africa must leverage private sector investment through new models of public-private partnerships (PPS).
African nations should adopt international best practices in improving on infrastructural development architecture in their respective countries. It must be added that such practices should take cognisance of local peculiarities and should therefore adapt the practices to local conditions.
Accordingly, there is need for Africa to adopt and be committed to a consistent programme of human capacity building. This requires training and development of manpower in all facets of project financing and infrastructural development.
The Build-Own-Operate-Transfer (BOOT) option of ppp is recommended as a proactive strategy for transforming public infrastructures in Africa. The positive lesson from the success in the telecommunication infrastructure attests to the viability of ppp.
The African government responsibilities to develop infrastructures should not be sacrificed on the altar of ‘marriage of convenience’ expressed in project financing and ppp strategy for infrastructural development.
Rather, these reforms should be galvanised with New Public Management (NPM), a contemporary approach to governance which have been adopted in such Anglo-Saxon countries as the United States, Canada, United Kingdom and Australia.
No better time than now should provision of ICT in African countries and involvement of the private sector in ICT capacity development be encouraged. To this end, appropriate legislative and policy frameworks should be put in place to protect data and collaborate with other countries within and outside Africa in order to formulate information policy to guide regional and international exchanges and transactions.
Furthermore, information professionals should be involved in drafting such legal and policy frameworks.
Response mechanisms, legal and supra legal, must be created to mitigate human rights related infrastructure risks and the responses by project financing and infrastructure sponsor companies, financial institution and governments respond. Stakeholders including consumers, citizens, NGOs and even host government would delight in the reduction of infrastructure risks.
African governments should provide an enabling environment for infrastructure development, including adequate funding of appropriate institutions and legal frameworks.
In order to attract investors, it is critical to reduce transaction costs (such as taxes, fees, dues, levies, etc) payable by investors and financiers.
Government, private sector and development partners need to support the preparation of bankable projects. Special assistance should be provided to the “PIDA Technical Assistance (TA) Facility”, located at the NEPAD Agency, to support the acquisition of immediate technical expertise, as well as the development of Member States’ skills capacity through on the job-training of officials working in key government entities.
It is important to consider innovative financing products such as Listed Special Purpose Vehicles, as well as to tap into African financial markets, Diaspora remittances, intra-African investment and sovereign wealth funds.
The Dakar Agenda for Action should be implemented while paying a particular attention to encouraging private sector involvement in infrastructure development and promoting public private partnerships.
African governments should also promote policies that encourage indigenous or local “champions” who through their entrepreneurial efforts, can drive regional infrastructure projects that are both financially profitable and socially beneficial.
Africa should adopt some financial instruments by establishing various funds and institutions that will accelerate implementation of infrastructure projects. Such funds and institutions should include Africa Infrastructure Development Fund, Africa Credit Guarantee Facility and Strategic Development Sovereign Wealth Funds, and Sovereign Pension Fund, Africa-owned equity funds, and Regional Stock Exchange Markets.
- Concluded
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