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23 September 2014
 
Consultancy Africa Intelligence (CAI) is a South African-based research and strategy firm with a focus on social, health, political and economic trends and developments in Africa. CAI releases a wide range of African-focused discussion papers on a regular basis, produces various fortnightly and monthly subscription-based reports, and offers clients cutting-edge tailored research services to meet all African-related intelligence needs. For more information, see http://www.consultancyafrica.com
 
 
   
 
 
Article by: Consultancy Africa Intelligence CAI
 
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Africa has seen the rise of a new structure in public service provision that not only augments the capacities of Governments, but improves service delivery and creates employment for its citizens. Public-Private Partnerships (PPPs) combine the efficiency of the private sector with the authority and risk-sharing capacity of the Government, but are these partnerships as clear-cut as they seem?

Since the end of the Cold War and the implementation of structural adjustment programmes (SAPs), Africa has lost some faith in the power of the market economy. With corruption and the state still being looked upon as the provider of the citizenry, it is perhaps not surprising that a call for the privatisation of public goods and infrastructure will be perceived with suspicion by its citizens. This paper will look at the new development path followed by Governments in the Southern African region in providing basic services and building developmental infrastructure: that of Public-Private Partnerships.

Conceptualisation: Public-Private Partnerships

What are PPPs? Researchers often debate a suitable and all-encompassing definition of what PPPs are. Van Ham and Koppenjan conceptualise PPPs as the “cooperation of some sort of durability between public and private actors in which they jointly develop products and share risks, costs and resources which are connected with these products or services.” (2) Another definition of PPPs defines it as a “risk-sharing relationship based on the shared aspiration between the public sector, the private sector and one or more partners from the voluntary sectors to deliver a publicly agreed outcome and or public service.”(3)

Researchers are not unanimous in the conceptualisation and definition of what public-private partnerships are. There are a variety of contracts and arrangements between many Governments and private actors - some are specific and customised for a specific department or for a specific project. This variation makes it difficult for researchers to conceptualise and describe the nature of these arrangements. Some researchers are of the opinion that PPPs are organisational and financial arrangements that can be used as a tool to expand governance and infrastructural management, while others have dubbed the phenomenon a political language game.(4)

Firstly, in terms of this contract being viewed as an organisational and financial arrangement, it becomes clear that the partnership is undertaken with sound and rational calculations and with good business sense. The advocates of this type of conceptualisation argue the benefits and advantages that PPPs can hold for all partners and actors involved in the partnership, as well as those who are due to benefit from the product or services provided. This makes PPPs different from the usual Government-private company relationship in that the Government is not the client who defines the problem and seeks the most cost-effective way and efficient company to do the job; it is a mutual and long-term partnership that involves knowledge sharing and increased risk sharing.(5)

Secondly, the other perception of PPPs is as a clever language game that hides the reality of the privatisation of public resources and infrastructure. Ken Coghill and Dennis Woodward are of the opinion that political issues are concealed behind the language of PPPs.(6) Unlike privatisation, PPPs have failed to become a major political issue.(7) This can be ascribed to the lack of understanding of what PPPs are among the public and the dominant acceptance among opposition parties and other interest groups of neoliberal approaches to service delivery and infrastructural development.(8)

In Africa specifically, the private sector is viewed with suspicion based on historical and current experiences with SAPs and globalisation. The idea of a PPP is often received positively due to the willingness and risk taken by the private sector in order to assist the public sector and Government in providing much-needed infrastructure and services. The fact that these ventures are called public-private partnerships is more palatable to the public and left-wing opposition than calls to privatise public infrastructure and services.

PPPs in Southern Africa – Driven by development and progress

PPPs are not a new phenomenon in governance. They have an interesting history and a variety of organisational structures and origins. In Africa itself, it is not something new as Governments have partnered with the private sector in providing basic services such as water purification and infrastructural development in countries such as the Democratic Republic of Congo (DRC) and South Africa. PPPs are however differently perceived than the usual contracting-out of public services and products to the private sector. In the Southern African context, the private sector is mainly perceived as being profit-driven rather than developmentally driven, but the new PPPs have a clear focus on infrastructural development and the provision of basic services for the ultimate goal of development and the improvement of human resources in beneficiary countries.

It has become more common for the private sector to change their approach from predominately being involved in financing infrastructural development and resource ownership to a move towards partnering with the public sector in the provision of basic services and products such as health, waste removal and welfare provision. These “soft” economic ventures have attracted the private sector into Africa and other developing countries. This can be justified by consumers’ increased interest in projects and causes that are focussed towards development and improving living standards for all. This seems to be a common trend in the Southern African region, where local Governments or even national Governments are cooperating with the private sector and voluntary sector to provide basic services that the Government itself cannot provide efficiently due to capacity and resource constraints.

ACHAP model – A successful PPP in Botswana

A successful example of such a PPP in the Southern African region is the African Comprehensive HIV & AIDS Partnerships (ACHAP) that was initiated to manage Botswana’s antiretroviral (ARV) programme in 2001.(9) In an article written by Iiavanii Ramiah and Michael R. Reich, they looked at the achievements and challenges for the partnership between the Merck Foundation, the Bill and Melinda Gates Foundation and the Botswana Government.(10) The ACHAP model was based on a partnership between the private sector and the Botswana Government through which the objective of the private sector and voluntary sector was to make a significant difference in a single country, where it aimed to provide comprehensive support in HIV & AIDS prevention, treatment and care and it was designed to include the Botswana Government as both partner and grantee.(11)

Based on the ACHAP model, the private sector could contribute to the programme by ensuring that funds were used and managed effectively and the partnership was based on a commitment to building institutional capacity within the Government.(12) According to Ramiah and Reich, this is a “new trend in corporate philanthropy that emphasises the greater involvement of the private sector in development.”(13) The strength of the ACHAP model was based on certain key factors that included access to substantial financial resources, access to streamlined operating systems, access to global managerial networks and ACHAP’s commitment to comprehensive support and responding to Government requests.(14)

This model of PPP is a good example of a public-private partnership through which Government and the private sector, as well as the donor sector were actively and equally involved in the provision of ARVs and HIV & AIDS prevention. This partnership did experience its share of limitations and problems. However, the significance of this model is that the ACHAP was the first of its kind in Africa and has provided insight with regards to future partnerships.(15) On the other hand, this model highlights some of the advantages and benefits that PPPs hold for both the public and the private sector. It solves the problems facing many Governments in Africa, which include a lack of financial resources in funding these developmental projects and lack of capacity and human resources needed to implement these development projects and provide basic services.

The private sector contributes to these partnerships by providing financial and human resources and assisting the Government through providing knowledge and managerial approaches and solutions to the provision of public services and ensures the effective management and implementation of these services or producing infrastructure. The Government, on the other hand, becomes an important partner for the private sector in that the public sector shares the risk of financing and implementing these projects and provides the private sector with the necessary assurance of a long-term business partnership that benefits both the private and public sector. However, whether this partnership benefits the public or the citizens of that country, is an uncertainty.

Concluding remarks: the future of PPPs in Africa

Will this new development partnership between the public sector and the private sector solve the continent’s problem with inefficient and corrupt Government administrations and lack of resources and capacity to provide basic services to its citizens? There are some challenges of PPPs that are seldom discussed or unveiled by the partnership in fear of the project receiving opposition. According to Carsten Greve and Graeme Hodge, the economic and financial benefits of PPPs are still subject to debate.(16) Another criticism that has been launched against PPPs is that they provide “limited opportunity for meaningful levels of transparency and public participation.”(17)

This paper is of the notion that more research and study needs to be done concerning the nature of public-private partnership and how it can be made more effective and accessible to the public in order to ensure transparency and that the citizen’s who receive these services get value for their money. In conclusion, public-private partnerships, whether simply an organisational and financial arrangement or a clever way to mask privatisation, can be the key to development in Africa.

NOTES:

(1) Contact Clarissa Graham through Consultancy Africa Intelligence's Africa Watch Unit ( africa.watch@consultancyafrica.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).
(2) Van Ham and Koppenjan quoted in Greve, C. & Hodge, G., 2005. “Introduction” in Greve, C. & Hodge, G. (eds). The Challenge of Public-Private Partnerships: Learning from International Experience. Northampton: Edward Elgar. p 4.
(3) Grimsey, D. & Lewis, M.K, 2004. Public-Private Partnerships: The Worldwide Revolution in infrastructure provision and project finance. Northampton: Edward Elgar. Pp 1-18.
(4) Greve, C. & Hodge, G., 2005. “Introduction” in Greve, C. & Hodge, G. (eds). The Challenge of Public-Private Partnerships: Learning from International Experience. Northampton: Edward Elgar. Pp 4-8.
(5) Greve, C. & Hodge, G., 2005. “Introduction” in Greve, C. & Hodge, G. (eds). The Challenge of Public-Private Partnerships: Learning from International Experience. Northampton: Edward Elgar. Pp 5-6.
(6) Coghill, K. & Woodward, D. 2005. “Political Issues of public-private partnerships” in Greve, C. & Hodge, G. (eds). The Challenge of Public-Private Partnerships: Learning from International Experience. Northampton: Edward Elgar. Pp 81-93.
(7) Ibid, p 81.
(8) Ibid, p 91.
(9) Ramiah, I. & Reich, M.R., 2005. Public-Private Partnerships and Antiretroviral Drugs for HIV/AIDS: Lessons from Botswana. Health Affairs, 24 (2): p. 545.
(10) Ibid.
(11) Ibid, p. 546.
(12) Ibid.
(13) Ibid.
(14) Ibid, pp 547-548.
(15) Ibid, pp 548-550.
(16) Greve, C. & Hodge, G., 2005. “Introduction” in Greve, C. & Hodge, G. (eds). The Challenge of Public-Private Partnerships: Learning from International Experience. Northampton: Edward Elgar. p. 9.
(17) Ibid.

Written by Clarissa Graham (1)

Edited by: Consultancy Africa Intelligence CAI
 
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