Agric. Econ. - Czech, 2018, 64(9):389-398 | DOI: 10.17221/161/2017-AGRICECON

Financial sustainability of a public-private partnership for an agricultural development project in Sub-Saharan AfricaOriginal Paper

Donato MOREA^*,1, Marino BALZARINI²

¹ Department of Industrial Engineering, University of Rome Tor Vergata, Rome, Italy

² SGI - Studio Galli Ingegneria S.r.l., Rome, Italy

Land, water, sun, infrastructure, capital and know-how are needed for any agricultural development. Sub-Saharan Africa has immense natural resources, though often not immediately available altogether in the same place, but is generally short of the other inputs. That is why a public-private partnership can be an effective approach to deal the projects with modern agricultural development: public partner provides land, most of the infrastructure and finance; private partners provide the intensive farming practice, processing know-how and part of the equity. Financial analysis of lower and higher capital demanding scenarios and testing of the impact of changes in the critical drivers of costs and revenues shown that a combination of staple crops and cash crops can be found to balance national food security policy targets and financial appeal for private partners in a mutually satisfactory venture capital. The effect of environmental and infrastructural constraints was also considered, showing how likely-to-happen threats on the side of the implementation of the project may turn into challenging opportunity to climb the agribusiness value chain upward.

Keywords: agribusiness value chain, investment analysis, modern agricultural development projects, project financing

Published: September 30, 2018  Show citation