Investment in Africa: Capital will go where it is looked after

Investment in Africa: Capital will go where it is looked after

Somerset West – Capital will always go where it is looked after, Patrick Dlamini, CEO and managing director of the Development Bank of Southern Africa (DBSA), has said at the First African Roundtable on Infrastructure Governance taking place in Somerset West.

“Integrity of the rule of law is critical for investor confidence as they have options to go anywhere in the world,” he cautioned.

“As development banks we need to see how we can partner with governments to make sure infrastructure projects are bankable.”

He said it is important to make sure that these public sector projects are structured in such a way that they can end up standing on their own and not become a cost burden on the people of a country.

“Investors don’t want to be associated with something that has a [liability]. For instance, we cannot allow that to happen to SA utilities as investors would then not be interested in them,” he said.

He added that there is no pressure on the DBSA from the SA government regarding investments in SOEs.

“The SA government is equally worried about challenges it faces in SOEs like Eskom. We want Eskom to succeed so good governance is very important as it holds so much risk to the economy of SA,” he explained.

“We are actually worried about the capacity of local governments as that is where the tyre hits the road.”

The DBSA wants to come up with blue prints for infrastructure investment in Africa and sees events like the First Roundtable on Infrastructure Governance as an important part of the process to reach mutual goals.

He also emphasised the importance of curbing wasteful expenditure in public infrastructure projects.

“We need to check the causes where there are leakages. A lot relate to the lack of capacity of municipalities and a lack of governance at local government levels. There are also wastages in public procurement,” he said.

“If the government can be efficient in procurement it could do so much more. With control measures in place we can have sufficient resources for investment in the country. Both the public and private sector must address this and check that the best prices were obtained.

“Give investors the right message and business confidence in our economy,” he said.

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