Financing Development Through Public Private Partnerships (PPPs) in Botswana

E K Botlhale

doi:10.4102/apsdpr.v4i1.105

Abstract

Largely due to chronic fiscal stress since the recent global economic crisis, there are calls for alternative ways of financing economic development. Public Private Partnerships (PPPs) have been identified as such alternatives. There is an increasing awareness that the private sector is not a competitor but a strategic partner in the drive for economic development. Therefore, governments are leveraging on the benefits of PPPs. Using the case study of Botswana, which is experiencing revenue challenges as diamonds have not been selling well since 2008, this theoretical paper explores the possibility of using more PPPs to finance economic development. Grounded in interpretivist research methodology, using the survey research strategy and using secondary data sources in the form of a desk survey, it concluded that there is a case for the increased use PPPs to finance economic development. It further concluded that while there is demonstrated appetite for PPPs, to date, only a few projects have been procured through PPPs. Hence, moving forward, and given the deteriorating revenue situation, there is a need to use more PPPs to deliver economic development. Finally, the paper argues that there is a need to reform the current PPP legal-institutional architecture and bench-mark and peer-learn from best PPP practices in Africa such as South Africa and Nigeria and beyond.

Highlights

In the recent past, Private Partnerships (PPPs) have been used to procure public works and services all over the world (Colverson, 2011; Osbourne, 2000; United Nations, 2008)
Two key factors that drive the use of PPPs include public sector reforms such as New Public Management (the drive to run a government like a business à la Gore (1993) as well as the chronic fiscal stress that occurred after the recent global economic crisis
There is a dearth of literature on PPPs in Botswana; some of the only available works being Mpabanga (2011) and, Rao and Vokolkova (2007). This is the gap in the Botswana-specific literature on PPPs and, so, this paper aims to add to the burgeoning literature on PPPs in Botswana

Summary

Introduction

PPPs have been used to procure public works and services all over the world (Colverson, 2011; Osbourne, 2000; United Nations, 2008). Initially restricted to public infrastructure in the form of roads, railways, prisons, government buildings, power generation, or water and waste treatment facilities, PPP has increasingly moved into the provision of so-called “social infrastructure” such as schools, hospitals, and health services (Colverson, 2011:3). There is a reason to believe that PPPs will continue in their ascendancy and will overshadow the traditional/conventional public procurement model where the government provides the sole financing for projects. The private sector possesses better mobility than the public sector; the government lacks the ability of raising massive funds for the largescale infrastructure projects, but private participation can mitigate the government’s financial burden (Walker et al, 1995). The private sector will get to know the needs of the public sector client and over time; and the private sector has more to offer than the public sector in terms of skills, technology and knowledge providing better quality facilities (Ghobadian et al, 2004)

Objectives

Methods

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Conclusion