The State of Affairs of Public Private Partnerships in Ethiopia

Abstract

Owing to the increasing demand for social and public services and the inability of governments to satisfy these demands, the need for introducing public-private partnerships (PPP) has recently been remarkably increasing in developing countries. This was not an exception in Ethiopia. Thus, this study was designed to examine whether Ethiopia had the necessary institutional, legal, and policy frameworks for PPP; to explore if there were existing PPP projects and determine their typology, as well as identify potential PPP areas and the associated challenges. To this end, a qualitative exploratory design was employed. Data were generated through in-depth interviews and focus group discussions from several federal and regional institutions and municipalities and through document analysis and literature review. The study reveals that Ethiopia has recently developed PPP specific policy, legal and institutional framework, albeit there is a vast capacity deficit from the government side to implement complex PPP contracts. Although not yet well institutionalised, there had been some PPP-oriented contract agreements in Ethiopia before the PPP-specific framework was developed in 2018. They include contracts for utility billing, security and cleaning, urban greenery, waste disposal, and the construction of condominium houses. Most notably, the government has recently awarded PPP-based concessions to foreign companies to develop energy plants and several projects are already in the pipeline. However, implementation is still at an initial stage. Some recommendations have been forwarded so that Ethiopia could get the most from PPP without harming its national interest and crowding out the local private sector. Keywords: Ethiopia; Public-Private Partnership; PPP; PPP framework; PPP forms/modalities