The growing public sector debts, the need for jobs and employment creation and provision of more goods and services by the government calls for radical measures, including an understanding that the public sector faces many constraints globally, Kenya included. That is why the G7 Meeting in Italy held between June 15 and 16 2024 noted the need for increased funding for African development, providing sustainable and transparent finance for developing countries committed to substantial reforms and private sector investment, and enhanced domestic resource mobilization. Countries need to ensure increased self-financing and sustainable mechanisms, including greater role of the private players, use of Public Private Partnerships (PPPs) and enhanced domestic resource mobilization through reforms and incentives. The International Monetary Fund and other stakeholders pointed out in 2006 five major circumstances for the excellent application of PPPs.
These included: One, the existing level of constraints that the government faces in promoting PPPs or other private sector engagements; two, the existing political environment; three, the market conditions and the prevailing macroeconomic issues; four, the existing institutions and their quality including the applicable laws and regulations; and fifth, the past experiences such countries have had with the application of PPPs. These conditions are positive for Kenya and hence the private sector needs the creation of an enabling environment that includes: favourable policies and laws, incentives and sharing of responsibilities between partners for efficiency and effectiveness in executing programmes and projects. There are three reasons why there should be more roles for the private players under PPPs or other programmes in a country. First, throughout history, the private sector has been a constant partner with the public sector in the development and financing of infrastructure and other services, including employment and job creation.
Such private sector participation brings innovations, financial, technical, efficiency and effectiveness expertise alongside balancing the socio-political, legal and economic realities of countries. Second, political processes determine the nature, location and infrastructure and service development levels in any given region because political players have a bigger role in infrastructural development policies and financing. This has traditionally led to underfunding of some areas and sections of countries, and hence closer collaboration with the private sector, including through PPPs can cure such imbalances. Third, the best practice for infrastructure and service delivery is for public sector agencies to undertake the roles of regulation, guarantees and other possible forms of support to the private players, which incentivizes private sector involvement in infrastructure and service delivery. Dr Giti is an urban management, public – private partnerships (PPP) and environment specialist. mutegigiti@gmail.com , @danielgiti
Dr. Daniel Mutegi Giti 