Botswana’s National Development Plan for 2017–23 (NDP) recognizes that the availability of good infrastructure is one of the factors that will contribute towards the country’s economic growth. To this end, the NDP underscores the government’s commitment to make more use of PPPs as a means of procuring and financing infrastructure projects.
While the country’s PPP framework is supportive of private sector participation in infrastructure projects, there are several areas where improvements could make it more effective.
Need for clarity on the definition of a PPP in Botswana
In Botswana’s Public Finance Management Act, the definition of a PPP is slightly different from that set out in the country’s PPP Policy. For example, the definition of a PPP in the act extends to arrangements where the private party performs a public function not only on behalf of a public entity but also “on its own account.” The definition of a PPP under the PPP policy does not appear to envisage such an arrangement.
Further, under the PPP Policy, only projects that demonstrate value for money shall qualify as a PPP. The definition of a PPP under the Public Finance Management Act does not reference value for money in its definition of a PPP.
Establishing who has the authority to procure and contract for PPPs
Under the PPP Policy, ministries, government departments, and public enterprise/parastatals are responsible for “identifying and initiation, sponsorship, procuring, implementing and managing PPP projects.” These entities, therefore, have the power to procure PPP projects and enter into PPP contracts.
However, the Public Finance Management Act appears to limit the public entities that have the power to enter into PPP contracts. Under the act, payments made to a private party under a PPP contract must come from the Consolidated Fund—a fund established under the country’s constitution. This can be interpreted to mean that only public entities that derive their funds from the Consolidated Fund can enter into PPP contracts.
Not all public entities, however, derive their funding from the fund. According to the Public Finance Management Act, it is questionable whether public entities that don’t derive their funding from the Consolidated Fund qualify as contracting authorities for PPP arrangements. This issue also calls for clarity.
Establishing a clear role for the PPP Unit
In line with the practice adopted by many successful PPP programs internationally, Botswana has a dedicated PPP Unit under the Ministry of Finance and Economic Development tasked with coordinating the implementation of the country’s PPP agenda. According to the PPP Policy, public institutions undertaking PPP projects are required to establish a PPP Project Committee for each project. The composition of the PPP Project Committee includes representatives from the public institution undertaking the PPP project and a Project Advisor from the PPP Unit. In a post published on this blog, Stanley K. Kamau, the former head of Kenya’s PPP Unit, said that proper resourcing of the PPP Unit is key for ensuring the success of the country’s PPP agenda.
In addition, Botswana’s PPP Policy mandates the PPP Unit to approve the selection of the private party to undertake a PPP project. This, coupled with its role as project advisor on each PPP project, may pose a potential conflict of interest. It is therefore important for the PPP Unit to be designed in a manner that avoids this potential conflict of interest.
Rules for unsolicited PPP proposals
The PPP Policy does not prohibit unsolicited PPP proposals, provided that the fundamentals of a competitive and transparent procurement process are adhered to. For the successful implementation of unsolicited proposals, there may be a need for Botswana to consider putting clear rules in place that govern competition and the processes to be followed regarding unsolicited PPP proposals.
Botswana does not have a PPP law. Instead, the country has a PPP Policy that goes a long way to provide guidance on the development and implementation of PPP projects. However, the policy does not have the force of law. Further, there are various issues that require further clarity, some of which are set out above. These could be addressed by passing specific PPP legislation to benefit all stakeholders in the country.
For more information about PPPs in Botswana, visit:
PPP Knowledge Lab – Botswana
Botswana Ministry of Finance and Economic Development
Disclaimer: The content of this blog does not necessarily reflect the views of the World Bank Group, its Board of Executive Directors, staff, or the governments it represents. The World Bank Group does not guarantee the accuracy of the data, findings, or analysis in this post.
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