In the recent past, African Economies made the decision to establish a Continental Free trade Area (CFTA) to bring together 54 countries to set up and benefit from a common market pool. This decision certainly has a leg to stand on considering the rapid urbanization and industrialization that African countries are currently experiencing. In addition, there has been an increase in population growth on the continent. According to UN Economic Commission for Africa, the continent’s urban population is expected to rise by 50 percent by 2035, which in essence means considerable demand for employment as well as increased quest for infrastructure.
It is against this backdrop that there is need to leverage on the Public-Private Partnership (PPP) arrangements to meet these eventualities as well as promote economic development, given that governments cannot solely deliver these services. Energy has been identified as an enabler to economic growth. Ellison Wright, the Senior Program Coordinator for the World Bank-led Global Wildlife Program (GWP) reckons it’s through investing in PPP frameworks that African countries and especially South Africa, which is not only an emerging market but also an economic power house in the continent, are going to realise optimal benefit of economic growth.
It is, therefore, incumbent on policy makers in South Africa to lead a structured deliberation with all other stakeholders, which include the civil society, communities, etc., with a view to having a comprehensive, structured PPP framework that is responsive to the needs of the general public.
There is also the need to demystify the notion that has always been that PPPs are often pursued as individual projects. Prof Malcolm Morley, a leading Policy Analyst once said that there is need to have Public Private partnership capture holistic approach, which is having a framework arrangement that encompass both strategic context as well as the financial context. These two aspects can never be looked at in isolation if the PPPs in South Africa and by extension Africa will realize its full benefits. In 2018, for instance, a number of public-private partnership (PPP) initiatives across the globe — in Albania, Switzerland, Turkey, Saudi Arabia, the United Arab Emirates, Sri Lanka, and the United States — most of which revolved around the energy Sector and brought Independent Power Producers, Energy Agency, utility companies and thought leaders from the public and private sectors about trends they saw evolving that would impact the practice of PPPs in the next year or two.
Many governments face the reality of inadequate resources to manage various infrastructural projects and are concerned about being inundated by a wave of projects they really do not want to manage, or are incapable of managing. This offers great opportunities for PPP arrangements. It is imperative, therefore, to note that many countries are undergoing reforms or adopting legal frameworks to establish or improve enabling environments for PPPs. According to David Baxter a Senior advisor to the International PPP resilience centre (IPPPRC) & World Bank , these reforms are encouraging as they will help mitigate legal constraints that have caused developers and investors to avoid PPPs in certain markets.
Critical variable for Public Private Partnership success
Against growing scrutiny by governments and investors about PPP success rates there is increased focus on improving the abilities of governments to deliver projects. This is resulting in more efforts to develop and improve the procurement and management capabilities of public sector officials. This will result in a greater mastery of PPPs by the public sector and will avoid the exploitation of PPP initiatives by malfeasant actors. In many countries, newly constituted PPP units are also being formed that will provide technical support to novice PPP projects. In respect to energy, there is need for the public sector to understand the strategic context of private sector as well as that of all other stakeholders if the conversation around beneficiation of all sectors of the economy is going to be realised. And for this to happen, energy, which is an enabler ought to be given priority when drawing comprehensive PPPs arrangements.