Attracting Private Sector Investment for Connectivity: Domestic, regional and Global
- The group identified investor expectations as: good market prospects; attractive business environment; a reasonable well defined regulatory frameworks and/or strong contractual arrangement; and access to foreign exchange.
- Financier expectations were identified as: commercially viable and bankable projects; assured return, sometime with an upside potential; long-term commitment from lead sponsors; good management and proven technology; necessary permits, including interconnection agreements, completion arrangements; adequate security packages; and access to foreign exchange.
- International Finance Corporation Manager, Telecommunications Division, Mr. Kent Lupberger, provided as overview of IFC operations in Africa noting that in the telecommunications sector, IFC clients included established private or about-to-be privatized operators in basic networks, new operators in activities such as cellular, paging, regional telcos, mobile trunk radio, cable TV, data transmission, satellite, etc.
- IFC made its first investment in telecoms in 1969. It currently has 40 investments in 25 countries and is increasingly focusing on the more difficult markets.
- IFC experience shows that success involves private/public partnership with the government setting the rules of the game, resolving conflicts, creating investment-friendly environment, preparing state enterprises for privatization, authorizing new operators and reconciling commercial and social objectives. The private sector on the hand takes the led in ownership, management and financing.
- The group discussed the parameters for creating an enabling environment and there were differing perspectives on the meaning of the term in some countries. Note was made of the fact that some poor small African states stood the risk of missing out completely as they were unlikely to attract sufficient foreign investment and yet could generate enough local resources to modernize the sector.
- An interesting experience in telecommunications development in Somalia was highlighted as an instance of success in the absence of a functioning state.