An analysis of public private partnership in emerging economies

Abstract

This article examines the significance of Public Private Partnership (PPP) in emerging economies. The major focus of the paper is the African continent. The article briefly discusses the origin and implementation PPPs in different continents across the globe. A qualitative research paradigm is adopted to analyse public private partnerships in Sub-Saharan Africa (SSA). Qualitative research is exploratory and is frequently used to investigate a subject area in which there is limited information. This method of investigation sheds light on the different PPP projects. A case study strategy adopted in this study was used create understanding of the different process emanating from the implementation of PPPs in Africa continent. A comprehensive understanding of PPP implementation in SSA is essential. PPPs should be considered in sectors where there is a need to improve infrastructure and service delivery. Every government should have legislation in place as well as a regulatory framework on PPPs to facilitate local and foreign investors to implement new projects. The absence of a legal and regulatory framework on PPPs hinders close collaboration between the public and private sector in certain countries in Sub-Saharan Africa. Anecdotal evidence from interviews with public officials indicates the need for government to focus on a specific project where it (government) perceives a need for a private company to participate. This article argues that the Build-Operate-Transfer (BOT) project is an excellent model for governments in SSA where there is a deficit infrastructure, required to provide improved service delivery. Most BOT projects require sizeable financial investment. Most governments prefer to use BOT to construct specific infrastructure such as new electricity power plants, toll roads, prisons, dams and water plants. Experience has revealed that BOT agreements tend to reduce market and credit risk for the private sector because in most instances government is the only customer, thus reducing the risk associated with insufficient demand and the inability to pay.