Prospects of Public- private Partnership (PPP) in Ethiopia

Public- private- partnerships (PPPs) have been introduced as an alternative strategy to resource mobilization and as a way of embedding efficiency gains in building the infrastructure and delivering public services. Ethiopia is pursuing an ambitious transformational change involving huge public investment to address infrastructural deficit and public services delivery gaps. While the Government is committing significant budget resources to infrastructure needs and social services, it nonetheless faces significant budget constraints. It behoves government and development partners to explore alternative vehicles which could mobilize resources to fund public investment. The environment in Ethiopia suggests that the private sector is ready to get involved in PPP arrangements provided that the government puts in place the necessary policies and regulations. Moreover, there have been some pilot PPP initiatives in public services delivery – as in the case of “Lehulu”, a centralized billing service for water, electricity and telephone services.

Moving forward, the Ethiopian government should consider putting in place a legal and institutional framework to foster the establishment of PPPs. It is important that the development of appropriate legislation and regulatory frameworks factor in the public interest to ensure win-win arrangements. The potential of PPPs in a myriad sectors of the economy particularly in the infrastructure and social sectors, makes it an ideal strategy to help Ethiopia reach its development goals. The Ethiopia government should therefore be encouraged to mainstream PPP arrangements in the next medium term plan.