Minister for Finance, Dr William Mgimwa

The government recognises the role of the private sector in bringing about socio-economic development through investments in the country.

The private sector’s participation in areas previously treated as themonopoly of the public sector has made considerable contributions to Tanzania’s economic growth and development.

Presenting budget estimates for the fiscal year 2012/13 in parliament in Dodoma on June 14, this year, Minister for Finance Dr William Mgimwa stressed the significance of the public-private partnership (PPP).

Dr Mgimwa said the National Assembly passed the PPP Act No 18 of 2010 to enable the private sector to collaborate with the public sector in the provision of public services more effectively and efficiently and address people’s socio-economic needs.

He noted that during the 2011/12 fiscal year, the government established PPP desks in every public institution and issued operational guidelines for the appraisal of PPP projects.

The government wants to ensure there is compliance with all legislative and regulatory requirements in approving and supervising PPP projects and during the 2012/13 fiscal year, it will conduct training and capacity building programmes to all employees involved in the implementation of the PPP programme. It will also select few PPP projects to be implemented as pilot projects.

“The government will start by carrying out a pre-feasibility study of construction projects in road infrastructure, railways, ports, airports, water and office accommodation,” he said.

The minister thus called on ministries, independent departments, local government authorities, executive agencies and public corporations to utilise the opportunity to enter into partnerships in the construction of infrastructural development projects in line with the legislative and regulatory framework.

Tanzania Global Learning Agency (TaGLA) in collaboration with Kenya Development Learning Centre (KDLC) has organised a videoconference workshop on PPP on July 2-6. The workshop offers an affordable –and practical solution to the needs of developing nations and more specifically to the needs of the East African Region. Participants will be exposed to real PPP case studies from developed and developing nations. The workshop has come at the right time for it backs the government’s effort to involve the private sector in social development.

Some of the challenges that governments in developing nations and in the East African Region face include development of a business-friendly environment, clear legal frameworks and strong PPP coordination and finance units. The PPP units need to be willing and able to deliver, integrate the PPP approach into government policies, brief the market and educate the public sector about potential benefits arising from PPPs.

The aim of the workshop is to help participants overcome challenges in using the PPP as an infrastructural procurement option. The workshop is part of a deliberate transfer of skills in PPP to governments in developing nations.

The targeted audience includes public sector finance advisers, policy specialists, who want to be at the forefront of PPP policy formulation and development of PPP implementation strategies, public sector managers and public sector negotiators.

TaGLA is a government institution and a member of the Global development Learning Network (www.gdln.org). Its core function is to enable decision-makers, senior and mid-level professionals and practitioners access and share the wealth of knowledge and experiences available in the world through the global communication system and information and communication technologies.

Thus, a PPP is a viable means to effective management and maintenance of public goods and services. It is essentially an arrangement between a contracting authority and a private party in which the private party performs an institutional function on behalf of the institution, acquires the use of public property for its commercial purposes, assumes substantial financial, technical and operational risks in connection with the performance of the institutional function or use of state property; and receives a benefit for performing the institutional function or from utilising the public property.

The concept of PPP entails an arrangement between public and private sector entities whereby the private entity renovates, constructs, operates, maintains and manages a facility in whole or in part in accordance with specified output arrangements.

The private entity assumes associated risks for a significant period of time and in return, receives benefits and financial remuneration according to agreed terms. PPPs constitute a cooperative venture built on the synergy of expertise of each partner that best meets clearly defined public needs through the most appropriate allocation of resources.Tanzania encounters a number of challenges including lack of comprehensive policy, legal and institutional frameworks that provide clear guidelines and procedures for development and implementation of PPPs, lack of realistic and comprehensive technical, socio-economic and commercial feasibility analysis which leads to poor project design, inadequate enabling environment which includes lack of long-term financing instruments and appropriate risk sharing mechanisms and insufficient capacity negotiations, procurement, implementation and management of PPPs.

TaGLA’s videoconference workshop is designed to shed light on such challenges and address them. The private sector is involved in various

development projects in education, healthcare, agriculture and transport, among others. In Kilimo Kwanza, for instance, the government seeks to mobilise the private sector to substantially increase its investment.

PPP services have been implemented successfully especially by faith-based organisations in education, health and water sectors for many years. In the case of other sectors, the performance has been mixed largely due to the complexity of such undertakings and lack of clear guidelines on the criteria for public and private sector partnership.#n with the performance of the institutional function or use of state property; and receives a benefit for performing the institutional function or from utilising the public property.