Policymakers should look to Public Private Partnership development
By Abraham Diing Akoi Jr.
Just like many Sub-Saharan African countries, South Sudan finds herself in state of infrastructure deficits after independent in 2011. Barely seven years down the line the country is grappling with protracted conflict which many analysts’ terms as “ethnic conflict” rooted in historical differences. However, with the hope of peace being achieve in the near future, it is important that avenues for debates on development approaches are start now as conflicts principals are negotiating peace. South Sudan’s infrastructure especially physical infrastructure such as roads, electricity, railways, water and sanitation, energy among others are limited. This infrastructure constraints are pervasive and have a freezing effect on private sector activity such as individual private investment or economic development. While lack of infrastructure contributes to the fragmentation and isolation of large parts of the country, good and well-connected roads will support buying and selling of goods across States and across the bordering countries of Sudan, Ethiopia, Kenya and Uganda. The infrastructure deficiency come at the backdrop of decades of civils war and as a result lack of basic infrastructure become a serious impediment to the development of many sectors such as large agricultural sector that the country relay on for food.
Therefore, for South Sudan to address infrastructure deficits, I argue that South Sudan policymakers should adopt a well-elaborate and comprehensive PPP approach. The rationale for calling for PPP is based on assumption that, the PPP will provide technical expertise in infrastructure design, finance, implementation, management thus resulted in effectives services delivery to the people of South Sudan. South Sudan have limited finance to fund these infrastructure, limited capacity and expertise to design and deliver most infrastructure. The infrastructure will contribute to economic development/transformation (increase taxes, more investments) as people will start venturing in businesses across the country and possibly contribute to peaceful coexistent created by interaction and cross States movement and trades. Lastly, there is huge evidence that well-functioning infrastructure, public-private institutions collaboration on infrastructure development among others can contribute to economic transformation and eventually broader economic growth that result in poverty reduction, improve livelihoods among poor low-income countries like South Sudan. According to The Africa Infrastructure Country Diagnostic (2011), investment and improvement in infrastructure in South Sudan could boost per capita growth in non-oil GDP by 3.5 percentage, this argument emphasize the important of infrastructure if South Sudan wants to invest in economic transformation given the fact that majority of the population is living in rural areas without education, roads, health care, energy and poor livelihoods.
The aim of this argument is not to provide a comprehensive analysis of the PPP and South Sudan infrastructure situation but to open debates on the infrastructure development approaches and broader national development agenda. I will begin by briefly stating the important of infrastructure development to South Sudan, then explain PPP briefly, and thirdly, why it is important for South Sudan to consider PPP infrastructure development approach and finally I will look at the challenges and conclusion.
Why investing in infrastructure is important for South Sudan? The need for infrastructure is anchored on the arguments that infrastructures are important determinants of social and economic development. And that infrastructures are also “the key technological and physical assets of modern countries” connecting urban societies through complex interdependencies. For South Sudan, infrastructure development will result in free and quick movement of rural and urban (semi-urban) populations across their states boundaries and provide opportunities for rural population to engage in activities such as agriculture that form the basis for economic growth. Huge evidences show that food productivity at the rural areas contribute to poverty reduction and livelihood transformation as food will be available to the rural and town populations and raw materials for small emerging enterprises in the country. As such, infrastructure encompasses both technical and economic systems that “create institutionalized structures whereby goods of all sort circulate, connecting and binding people into collectivises (Frischmann, 2014). Furthermore, infrastructure will encourage foreign investment in the country which can result in employment that can generate more taxes thus provide base for economic diversification rather than relying on oil revenues. Lastly, the infrastructure can play a role in building peaceful coexistent, for example, if a farmer in Maridi, Wau or Malakal can travel to Juba to sell his/her goods and come back home the following day then there will be no incentive for such person to support conflict because he/she has something to loss. If schools are build and equip with materials and well pay teachers, then many people are likely to encourage their children to attend schools hence make it difficult for politicians to have idle youths to manipulate. Present of good infrastructure encourage policymakers to invest in projects that drive or support economic development in the country.
So, what is PPP? The PPP is an infrastructure development approach that is legally-binding through agreement/contract between the government and private business sectors for the provision of services to the people or construction of state infrastructure for the public use on behalf of the government. In most cases, the government task the private partner with the designing, financing, construction, management and long-term operation of a public infrastructure or hand over the infrastructure to the government after completion. But, the government remains actively involved throughout the project’s life cycle through monitoring and evaluation, for example, the private company manage the commercial functions aspect such as project design, construction, finance and operations and the government provide directives, guarantees or protections such as policy aspect. Today, many countries take this approach to develop their infrastructure because it transfers the risks that come with the project development to the private company. Also, the private sectors are believes to provide more effective services as many are profit oriented thus issues such as projects delay are avoided. In short, PPP refers to forms of cooperation between the public policymakers (authority) and private sectors (business campanies) with aims to provide the funding, construction, renovation, management and maintenance of an infrastructure or provision of a service (European Commission presentation, 2004).
Why PPP approach should be ideal for South Sudan infrastructure development? South Sudan emerge at the backdrop of complete infrastructure deficits, the entire country’s infrastructure system such as roads, railways, water and sanitations are non-existing just to mention few. The country is now relying on USAID funded tarmac road that connect South Sudan to Uganda for her imports while the whole country is still in need of infrastructure and remain unconnected. However, the current nature of infrastructure, the government of South Sudan whatever it will be call after peace agreement need to embark on infrastructure development using the PPP approach. This thinking is informed by the fact the South Sudanese government have limited funding that could finance infrastructure development whether energy, water and sanitation, schools, roads or bridges thus this gap need to be fill by the private sectors. Secondly, the private sectors or investors are generally well placed to manage operations and construction risks, provides expertise that public sectors lack in designing infrastructure. Thirdly, this approach will help the government to provide a much-needed services at quick possible timeframe compare to go it alone, for example, private sectors providers can attract other funding in some sectors such as river transport, energy, and public transport while private investors will help in allocating available resources to durable infrastructure construction, management and maintenance over long period.
Thus, the gains accrue from allocating to the private sector those risks where the are better handle than by the public sector, for example, risks associated with construction costs.
Fourthly, the country will benefit from employment create by multiples infrastructure investments, more tax from employment, induce private investments and services delivery to the population while the government will continue to shape the policies and public institutions building, invest the tax in schools, hospitals, developing agriculture sector, fishery among others. Finally, the PPP will result in improving cost-efficiency as private sectors will bring innovation that South Sudan need, huge experiences, flexibility and given the position of South Sudan it will encourage cross borders trade with neighbouring countries. The Rwandan’s Kigali Bulk Water Project shown how PPP can deliver much needed infrastructure. The Rwandan government and their partners have projected that the large-scale water treatment plant will produce 40 megalitres of clean water per day, equivalent to one-third of Kigali’s total supply. And that it will cover up to 500,000 domestic, commercial, and industrial customers (Rwandan government publication, 2016). This example illustrate that South Sudan through PPP can build such infrastructure given the fact that River Nile running throughout the country if only the policymakers adopt appropriate comprehensive infrastructure development approaches such as PPP.
Given the above definition and analysis, the PPP will induce transparency among the parties hence resulted in institution-building approaches or reforms to increases the removal of impediments and constructs competencies as parties would be interested in extracting money value from their investments. This present a great opportunity for South Sudan where public institutions harbour all sorts of abnormalities such as public servants’ incompetence among others. The nature of relationships and contracts/agreements pressure will encourage principles of good governance that include mechanisms for transparency, accountability, and inclusiveness as key aspect of engagement in PPP infrastructures development and continue infrastructure improvement something that would be good for South Sudan public institutions. So, the private sector will be responsible for the infrastructure development and management while the government will be responsive to change, encourage innovation and monitoring of the private sectors.
What challenges that might hindered PPP in South Sudan? One of the key ‘bottlenecks’ to the implementation of the much-needed infrastructure through PPP approach includes the formulation and adherence to the ‘right’ frameworks that are associated with preparation, financing, implementation and to an acceptable degree, the operationalization and maintenance of infrastructure assets that will be agree and committed to by the parties especially the government. South Sudan have had it share of scandals since independent among them Dura Scandal, LCs just to mention few. The second challenge is the conflicts uncertainties, the situation of South Sudan is very fragile, and this can discourage genuine private investors from committing their investment in infrastructure that cannot have immediate returns. Thirdly, the corruption menace that is embedded in unpredictable public institutions and poor legal frameworks that hindered transparent can affect the processes of negotiations and contract awarding as some public servants will demand kickbacks or bring companies that do not exist to offer services. Fourthly, public sectors officials limited capacity, most of the government officials have limited capacity to engage in high negotiations that involving contracts discussions that are more technical to interpret or understand, this can affect centralisation of the infrastructure policy across levels of government in such a way that investment decisions between central, state and sub-states public authorities are coherent. So, the question would be, can South Sudan negotiate appropriate standard PPP approaches to provide resilient infrastructure systems that are resistant or adaptive to shock events? Finally, the political wills and elites capture, there has been evident where government officials take public money for services that they have not provided Dura scandal is an example. And for the political will, how much will politicians be committed and willingly to allow the PPP to provide services without inferences? All these are worrying challenges that can derail PPP.
In conclusion, I have pointed to the relevance of adopting PPP to build infrastructure in South Sudan for reasons such as expertise, finance, management skills that come with private sector investors which are limited in South Sudan context. In addition, I talked about the important of infrastructure to South Sudan’s economic transformation and possibly play role in creating avenues for peaceful coexistent in the country. The question that someone would ask is whether South Sudan’s policymakers have the capacity to roll out such high technical infrastructure development approach and how long the conflict is going to be dragging on?