Tanya Kabuya shared this
I understand why many Africans believe Chinese, Turkish, European or American companies get infrastructure contracts by preference.
And sometimes, there may be legitimate reasons to question how contracts are awarded or how local participation is handled.
But after working in PPP, I've come to see another side of this.
Sometimes what looks like foreign preference is actually a transaction architecture problem.
Historically, there have been infrastructure transactions where the private consortium came to government with almost the entire architecture already designed:
The financing structure.
The EPC structure.
The risk allocation.
The revenue model.
The contractual protections.
The procurement assumptions.
And sometimes, even the implementation structure.
Meanwhile, the government side didn't always have an equally strong transaction team capable of independently structuring, stress-testing and negotiating the transaction.
So what happens?
The government doesn't necessarily negotiate its own transaction.
It negotiates the transaction the consortium has proposed.
And that's a very different thing.
This is also where some of the frustration around foreign contractors needs to be examined more carefully.
If a consortium arrives with financing, technology, EPC capability, suppliers, insurance and an execution model already packaged together, it can look like that company was simply "favoured."
But sometimes the more fundamental question is:
Who designed the deal?
Because whoever has the strongest transaction architecture often has significant influence over how the risks, returns, obligations and protections are ultimately distributed.
And this is why I don't think African governments only need better procurement rules.
They need stronger public-side transaction architecture.
They need people who can sit across the table from a consortium and understand:
"Why is this risk being allocated to us?"
"Why is this financing structured this way?"
"Why is this guarantee necessary?"
"Why does the revenue model look like this?"
"What happens if the assumptions don't materialise?"
"Where is the value for the public side?"
"Where is the local economic participation?"
And most importantly:
"What would this transaction look like if we designed it from our side first?"
Foreign companies are not inherently the problem.
African governments accepting transactions they did not independently architect can be a much deeper problem.
The objective isn't to keep foreign capital out.
It's to make sure that when foreign capital comes in, the government is negotiating from a position of transaction intelligence, not simply reacting to a deal that someone else has already designed.
That's the difference between participating in a PPP...
and actually structuring one.