An analysis of public private partnership in Sub-Saharan Africa

Abstract

A full understanding of the implementation of Public Private Partnerships (PPPs) in Sub-Saharan Africa (SSA) is essential. PPPs should be considered in sectors where there is need for improvement of infrastructure and service delivery. Every government should have legislation and 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 sectors. This article argues that the Build-Operate-Transfer (BOT) project is an excellent model for governments in SSA where there is lack of infrastructure to provide better service delivery. Most BOT projects require sizeable financial investment. Many governments prefer to use BOT for construction of specific infrastructure such as new electricity power plants, toll roads, prisons, dams and water plants. Experience shows that BOT agreements tend to reduce market and credit risk for the private sector because in most cases government is the only customer, thus reducing the risk associated with insufficient demand and the inability to pay.