The Efficacy of Public Private Partnerships (PPPs) In The Ghanaian Context.
Public Private Partnership is a collaboration between a government and the private sector for the purpose of more effectively providing services and infrastructure traditionally provided by the private sector. There is nothing new to revitalize the economies all over the world by their respective central governments, especially amongst developing countries such as Ghana by attempting to attract private businesses in a collaborated effort to achieve their desired developmental objectives. However, some of these collaborated efforts between governments and their private partners or development partners are fraught with a lot of challenges from the conceptual stage to the delivery stage, and developing countries like Ghana are not new to this. In Ghana, successive governments, at least since 2000, have openly acknowledged the role of the private sector in its efforts to bring development to the people. Public-Private Partnerships (PPPs or 3P) are increasingly envisaged as an attractive proposition for involving the private sector. Some of these challenges are discussed in subsequent paragraphs below.
The history of PPPs in Ghana can be said to be a recent development in the sense that the needed attention it deserves is now being paid to it, that is, policy issues with respect to contracts being signed without the needed feasibility studies and economic viability are now being undertaken as a result of the national policy that has been drawn. For instance, in 2004 the Public-Private Partnership (PPP) policy guidelines, which attempted to officially integrate the two sectors in the development process, the private sector was identified as Ghana’s “engine of growth” to indicate its importance. Unfortunately, the failure to fully operationalize the guidelines denied the sector the needed energy, and also the capacity (impetus) to drive the economy to the envisaged destination. As a result of its failure to fully operationalize, another national policy document on PPPs was drawn in June 2011, by the then Minister of Finance and Economic Planning, Dr. Kwabena Duffour. The objective of the document was to set out clearly the process for all aspects of PPP project development and implementation; “from project identification, appraisal, selection, to procurement, operation, and maintenance and performance monitoring and evaluation”. In that document, a PPP is defined as “a contractual arrangement between a public entity and a private sector party, with clear agreement on shared objectives for the provision of public infrastructure and services traditionally provided by the public sector”. It is important to note that there is nothing like “privatization” in this definition. In spite of the failure of such PPPs to deliver when they are initiated. Such Public-Private Partnerships have been witnessed from the corridors of power, MDAs (Ministries, Departments, and Agencies) and even at the district assembly level in the areas of waste collection among many other basic amenities. From here, a vivid image on the absence of a clearly defined national policy on PPPs to direct our paths when it comes to the contractual agreements poses a challenge that deters private partners away and makes the sustenance of existing PPPs a worry.
Also, there is the problem of opaqueness of PPP agreements in areas of role, responsibilities, and risks, resource sharing among many important factors that should be considered before an agreement is struck by both parties. Most often, PPP agreements in developing countries are faced with this major problem which draws such good intervention programs backward. These partnerships are designed to ease the living conditions of the ordinary citizen, but this is often not the case in our part of the world. Such agreements are mostly made closed and exclusionist (sole-sourced) in their nature to enrich a few at the expense of the populace and it is not only premature to place confidentiality in such negotiations above openness and accountability. It is only such good governance practices which will achieve the much desired and awaited promises the good people of this country deserve and have longed for since independence. A heartbreaking example could be seen with the much talked about 15 million Ghana Cedi guinea fowl project under the auspices of the Savanna Accelerated Development Authority (SADA). The controversies surrounding this good project could have been avoided if adequate information showing how monies were spent thus making them accountable. In 2002, the Government of Ghana tried to establish a PPP for the urban water sector and awarded a contract to Azurix through direct negotiations. However, the PPP was subsequently halted due to a lack of transparency and accusations of corruption in the selection process. Building stronger institutions of government such as the legislature can go a long way to help curb such unfortunate practices. These equipped institutions can demand accountability by conducting proper audits to make sure the desired objectives of these partnerships are achieved. Conversely, where the absence of strong and well-equipped institutions exists, allows for the breeding ground for such devilish actions to be propagated.
Furthermore, PPPs in developing countries are fraught with divisions along political lines, that is, the problem of inclusiveness. In a country so sharply divided along political lines like Ghana, it makes it difficult for PPPs continuity even when they are good and stand to benefit her nationals because they were not initiated by their preferred political party. This negative attitude has resulted in the settlement of numerous “judgment debts” due to the breach of contracts which have accrued interests on their initial investments. Most of the policies developed in developing countries like ours are mostly designed to benefit party members in power or their friends in opposition, and this defeats the purpose of creating PPPs to readily assist the government in providing tailor made solutions where they might fall short. There have been allegations made about certain social intervention policies in partnership with some private players which have question marks around them which have to do with corruption. For instance in Ghana, Microfinance and Small Loans Centre (MASLOC) and the National Youth Employment Program (NYEP) have all been cited to have engaged in certain actions that were not in the best interest of the country, but a few.
Lastly, there is the problem of local content and technology transfer. The issue with most PPPs, especially with foreign companies, has to do with the local participation to build capacity and foster good relationships. However, this has been the major headache of the governments of most developing countries who try to push for the right mix of local participation in the drawing of such PPP structures. Most of these foreign partnered private companies try to structure such arrangements to benefit their parent countries (developed) at the expense of developing countries. These policies sometimes end up stagnating our development process and leave us further impoverished. Numerous examples can be drawn across the African continent where some of these partnerships are halted either in their early stages or later on because they don’t serve the best interest of such developing countries.
In a nutshell, PPPs could be the locomotive for developing countries to achieve the needed development they crave for and even solve the problem of the recurrent budget deficits that confronts us by still carrying out developmental projects without exceeding our budgets as a result of such partnerships which could be used to provide schools, remedy the infrastructure deficits, healthcare, among many others. The challenges facing PPPs in Ghana are; policy issues that have to do with the legality that are mostly deficient in certain aspects, the opaqueness of PPP agreements in areas of role, responsibilities and risks, resource sharing among many important factors that should be considered before an agreement is struck by both parties, the problem of inclusiveness and the problem of local content and technology transfer. In spite of these challenges that confront such good initiatives, they can be harnessed with the needed vigilance, commitment and best practices that could even bring about new trends for others to emulate all over the world.
• Ministry Of Finance and Economic Planning. (2011). “National Policy on Public Private Partnerships (PPP)”.Ghana. Retrieved October 27, 2014, from
• Dowokpor, W. (2013, April 4). “Public Private Partnership (PPP) in Ghana”. Retrieved October 24, 2014,fromhttp://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php.html
•“Central Bank To Assist PPP Partners” (2014, October 21-27). Graphic Business, p.12.
• The World Bank Institute. (2012). “Public-Private Partnerships Reference Guide”. Washington DC