Making Partnerships Work for Africa

Image: Flickr, International Monetary Fund

Exactly how should business relate to government? For much of the last half century the relationship has been rocky in Africa.

Instead of pulling together to promote national champions, government and business often argue and accuse. Many governments see business as a cash cow or an exploiter to be restrained, regulated and forced to seek political approvals.

But there is another path – one Africa needs to follow. The idea of public-private partnerships (PPPs) grew from the contentious debates over privatisation, initially pushed by the IMF onto insolvent African states. Critics rightfully noted that privatisation forced from outside could be undemocratic, often enriching political cronies and causing layoffs. But PPPs offer the prospect of a third way that harnesses the technical, managerial and financial capacity of business into the performance of tasks government was doing poorly.

With well-structured deals, businesses and governments have collaborated to refurbish delinquent ports, roads and rails that governments could not manage alone. Businesses have effectively built and maintained hospitals and schools, and repaired roads. But PPPs are no panacea.

This issue of eAfrica looks at a recent study by the South African Institute of International Affairs, which examined successful and failed PPPs. It concluded that before Africa can unleash the potential of PPPs it must fundamentally change its relationship with business. If Africa cannot create and obey a transparent, effective system for keeping corruption out of the purchase of school books, it has little hope of keeping corruption out of PPPs. Where complex deals are awarded on the basis of who has the best plan and capacity, not merely the best price, there is greater room for politicians to determine who wins.

Using PPPs means building a corps of well-paid legal, engineering and tendering experts, injecting public scrutiny into every step of every public contract and seeking business opinion before casting PPP terms in stone. If the continent can get this difficult mix right, it can both dramatically improve its public services and infrastructure and boost its reputation as a good investment destination.

eAfrica, August 2005