As 2009 draws to a close and we sprint through the last quarter of the year, some significant developments will mark the end of Zambia’s 45th year of independence.
The Public Private Partnership Bill is expected to be enacted by parliament and assented to by the President before December. This legislation will usher in a formal framework for Public Private Partnerships in developing the nation.
It must be noted that business waits for no person or indeed for no legislation. To this end, Public Private Partnerships (PPP) have been in existence without any formal legislation for many years already. Schools, Universities, Hospitals, Pension Schemes, and many other products and services have been established under an un-written PPP relationship, in the spirit of doing business, and at the same time providing products and services to the public that would have been normally developed by the Government.
The PPP legislation enhances this ongoing effort and offers opportunities for structured and accelerated development if implemented with commitment and vision.
The last quarter of 2009 is likely to see the enactment of the Agriculture Marketing Bill too. This legislation attempts to rationalize the marketing of Zambia’s staple food crops and other agriculture produce with a special emphasis on formalizing the implementation of the Warehouse Receipting Program. The Warehouse Receipting Program will enable farmers to store their crops in fumigated and protected warehouses and still borrow finances from financial institutions against the warehouse receipt to enable them continue farming while their crops are in the process of being marketed.
This initiative constitutes the basis of another PPP model that develops collaboration between the private sector and the Government in the trading triangle of farmers, warehousing system, and the banking sector.
The Zambia Development Agency Act has recently undergone some amending to expand the opportunities for developing, managing, and investing the in the Multi facility Economic Zones (MFEZ) program. Again, the MFEZ roll out presents options for PPP implementation in developing the zones, managing the zones, and pro-actively marketing the opportunities for investing in the zones to both domestic and foreign investors.
The PPP initiative is not limited to the mining sector. The 2010 budget articulates programs for developing and upgrading airports around the country that will have a positive impact on enhancing tourism. Therein lays opportunities for PPP in construction work of the airport terminal buildings which will largely accommodate private companies in the tourism and related sectors.
The PPP story is therefore very useful as a tool for rapid economic development in Zambia, in addition to developing a mechanism to for public private dialogue and collaboration with a common goal. The common goal is one of economic and social development across the country.
The challenge is to recognize that the PPP program is not a ‘one size fits all’ remedy to resolve all our development needs. And yet the PPP idea is like a pair of shoes that one selects very carefully to be used to walk across specific terrain. Our challenge is to work out what terrain is applicable to PPP initiatives.
The 2010 budget appears to be a little too optimistic about the power and application of the PPP concept so it may be wise for us to take step back and re-assess where, how and why we want to apply it in the sectors that we have earmarked.
The rule of thumb is that the PPP concept works well in areas and sectors where private business naturally flourishes. Unfortunately the opposite is not necessarily true, whereby the PPP concept will thrive where the Government traditionally invests tax payer’s money. Government traditionally invests in sectors where there is strong regulation and control in the public interest and this is arguably the way it should be.
As Zambia looks to 2010 some good opportunities are available for PPP investments in developing programs to enhance tourism during the World Cup season in Southern Africa.
2010 also offers options for Zambia and Zambians to collaborate using the PPP model to make sure that the COMESA Customs Union serves the interests of the Zambian economy by developing strategies for trading with the member states such that Zambia expands her export markets and volumes.
China has taken full advantage of the PPP concept by working with her private sector to invest across the world in mining, construction, agriculture, and manufacturing to such an extent that China has the fastest growing economy of the world and holds foreign reserves in excess of two trillion US dollars.
The marketing of the PPP concept has been done. Now Zambia is faced with the challenge of strategic implementation with the new perception that a meeting point must be agreed upon where the public interest is served, and the private focus on making a profit is addressed.
Part of the PPP implementation process is to take stock of the work to be done with a view to setting aside the programs that are earmarked for tax payer investment through the Government mechanism, and selecting those programs that have the profile to return a profit on investment for the PPP program.
The wise always consider the concept development phase as the easy part of any initiative because it only carries the spirit and vision. The difficulty and the Devil are in the detail. So it promises to be, with the Public Private Partnership.
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