The Government recognizes the role of private sector in bringing about socio-economic development through investments. Public-Private Partnership (PPP) frameworks provides important instrument for attracting investments. Indeed, Public-Private Partnerships (PPPs) have been identified as viable means to effectively address constraints of financing, management and maintenance of public goods and services.
Additionally, PPPs can enable the Government to fulfill its responsibilities in efficient delivery of socio-economic goods and services by ensuring efficiency, effectiveness, accountability, quality and outreach of services. The concept of PPP entails an arrangement between the public and private sector entities whereby the private entity renovates, constructs, operates, maintains, and/or manages a facility in whole or in part, in accordance with specified output specifications. The private entity assumes the 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, risks and rewards.
Most PPPs implemented in Tanzania are concession arrangements for running existing enterprises with limited provisions for rehabilitation and new investments. It is noteworthy that in the case of services, PPPs have been implemented successfully by Faith Based Organizations (FBOs) in education, health and water sectors for many years. However, in the case of other sectors, the performance has been mixed largely due to the complexity of such projects and lack of clear guidelines on the criteria for public and private sector partnership.
Private sector participation in areas previously treated as the monopoly of the public sector has made major contributions to increasing the pace of growth and development in many countries. In contemplating to utilize this instrument, Tanzania encounters a number of challenges including:
(i) Lack of comprehensive policy, legal and institutional frameworks that provide clear guidelines and procedures for development and implementation of PPPs;
(ii) Lack of realistic and comprehensive technical, socio-economic and commercial feasibility analysis which leads to poor project design;
(iii) Inadequate enabling environment which includes lack of long-term financing instruments and appropriate risk sharing mechanisms; and
(iv) Insufficient capacity negotiations, procurement, implementation and management of PPPs.
To achieve the goal of poverty reduction by 2025, Tanzania has chosen to initiate and implement measures for the realization of green revolution by adopting KILIMO KWANZA resolution. This is the development vehicle for modernizing agriculture and thereby attaining economic transformation needed for sustained poverty reduction. Transformation of agriculture will depend on heavy investment in the development of capacity for delivery of PPPs to contribute to the attainment of Vision 2025. In this regard, the government recognizes that, greater private sector participation through PPPs in providing efficient, reliable and affordable socio-economic services, is fundamental for green revolution and broad based growth and sustainable poverty reduction. The creation and operation of an appropriate enabling environment to guide
public and private sectors, donor community and other stakeholders in PPPs will go a long way in contributing to the achievement of our development goals.
Furthermore, the national PPP Policy will serve as an important intervention to accelerate economic empowerment by ensuring that Tanzanians are adequately empowered in various PPPs interventions. In this spirit, a cross-section of various stakeholders have been involved in the development of this policy; and we look forward for the necessary collaboration for its implementation so that the noble goal of economic growth and eliminating poverty in Tanzania is achieved.
Hon. Mizengo P. Pinda (MP)
Prime Minister of the United Republic of Tanzania