The Sunday News
Economic Focus Dr Bongani Ngwenya
IN 2012 I attended the Zimbabwe National Chamber of Commerce (ZNCC) annual Conference at Elephant Hills Hotel in Victoria Falls in my capacity as the Bulawayo branch executive committee member. I asked a very pertinent question, which I still ask myself even today. The question is, “where is the role of our tertiary institutions in the Public-Private Partnership (PPP) initiative of the Government and the industry?”
By then the question was motivated by the PPP debate that was raging during the course of the conference. Apparently, that debate is still raging. It has not found its finality and conclusion, unlike the Special Economic Zones (SEZs) debate. I remember very well that my question among many other questions contributed to resolutions. The resultant resolution from that conference was the establishment of “a think tank” that would involve and consist of the public sector (Government), the private sector (industry) and the tertiary institutions (universities).
Now that the Government has finalised the SEZs, and even incorporated the initiative in the 2016 National Budget statement, my submission is that, marrying the SEZs and the PPP initiatives together, with a clearly defined active role to be played by our tertiary institutions will be the right ingredient or the missing link and cog to ensure the success of the SEZs economic development initiative. My worry is the passive participation of the tertiary institutions in the economic development of this country. To me the reason for the passive participation by tertiary institutions is structural. I will explain why I am saying so.
Some few definitions of PPP
A PPP is a partnership between the public sector and the private sector for the purpose of delivering a project or a service traditionally provided by the public sector. PPPs come in a variety of different forms, but at the heart of every successful project is the concept that better value for money may be achieved through the exploitation of private sector competencies and the allocation of risk to the party best able to manage it.
Source: A Policy Framework for PPPs, Department of the Environment and Local Government, Ireland.
A PPP is a partnership between the public and private sector for the purpose of delivering a project or service traditionally provided by the public sector. PPP recognises that both the public sector and the private sector have certain advantages relative to the other in the performance of specific tasks. By allowing each sector to do what it does best, public services and infrastructure can be provided in the most economically efficient manner. Source: Ministry of Finance, Czech Republic.
PPPs are a generic term for the relationships formed between the private sector and public bodies often with the aim of introducing private sector resources and/or expertise in order to help provide and deliver public sector assets and services. The term PPP is used to describe a wide variety of working arrangements from loose, informal and strategic partnerships to design, build finance and operate (DBFO) type service contracts and formal joint venture companies.
Source: 4Ps, UK local government procurement agency.
PPP brings together, for mutual benefit, a public body and a private company in a long-term joint venture for the delivery of high quality public services. Drawing on the best of the public and private sectors, PPPs provide additional resources for investment in public sectors and the efficient management of the investment. PPPs cover a wide range of different types of contractual and collaborative partnerships, including; the Private Finance Initiative (PFI); the introduction of private sector ownership into state-owned businesses; the sale of Government services into wider markets.
Source: Balfour Beatty plc
SEZs as fertile ground for PPP to achieve economic development
The Government has already identified and targeted industry and zones for SEZs in line with the Zim Asset, of which leather and textiles would be in Bulawayo; petro-chemicals, Lupane; tourism, the swathe of territory or corridor stretching from Victoria Falls-Gwayi–Binga–Kariba; finance, Victoria Falls; technology hub, Sunway City; and diamond cutting, Harare and Mutare, according to the 2016 National Budget Statement, in an effort to attract FDI and increasing capacity utilisation in the economy. It is my submission that the success of the SEZs initiative hinges on PPP initiative that should bring together, for mutual benefit, public bodies and private companies in a long-term joint venture for the delivery of high quality public services and products. Drawing on the best of our public and private sectors, PPPs can provide additional resources for investment in the public sectors and the efficient management of the investment. It is very clear that the Government alone can not be able to provide quality infrastructural development, evidenced by the capital expenditure/budget allocation in the 2016 National budget — $315 million, as compared to about $3,9 billion recurrent expenditures.
The Government could contractually enter into a variety of working arrangements options with the private sector, ie ranging from loose, informal and strategic partnerships Designed in a Build Finance and Operate (DBFO) type contracts and formal joint venture companies, to tap into the Private Finance Initiative (PFI). The introduction of private sector ownership into state-owned businesses — parastatals could go a long way towards fruition of the PPP initiative. The extension of the PPP initiative into the identified SEZs could help us increase capacity utilisation in the economy.
Industry-University Partnership
Universities and industry have been collaborating for over a century, but the rise of a global knowledge economy has intensified the need for strategic partnerships that go beyond the traditional funding of discrete research projects. I concur with the recent observations by the Minister of Higher and Tertiary Education, Honourable and Professor Jonathan Moyo that academics in our universities are failing to make an impact on developmental issues through creation of knowledge. As a result of the academic’s failure to research on sound projects the country is failing to make it into the top 50 universities in Africa. World-class research universities are at the forefront of pioneering such partnerships. They are designed to run longer, invest more, look further ahead and hone the competitiveness of companies, universities and regions. In short, they transform the role of the research university for the 21st century, anchoring it as a vital centre of competence to help tackle social challenges and drive economic growth.
I personally believe that our problem is a structural problem. Why am I saying that? Zimbabwe has no clear policy on Industry-University Partnership. The collaboration between the industry and universities is left as discretionary between the individual universities and the industry. Yes, there are universities in this country that do collaborate with the industry, but at that individual university level. Countries such as South Africa have a structurally clear policy on Industry-University Partnership. They have a policy on “Business Incubation” for example, where universities function as incubator organisations. They set up new enterprises, mentor those enterprises in designated Industrial Parks, provide the technological support, managerial skills support, office and factory space and also assist with mobilisation of the financial resources required to operate these new business ventures. These businesses are mentored until they mature to be able to operate on their own, through the designated proprietors. This is a business model that was proven to be working, not only in South Africa but in other countries as well.
When I asked the question, “where is the role of our tertiary institutions in this scheme of PPP?” during the ZNCC annual conference in Victoria falls in 2012, and I am still asking even today, I am envisaging that potential strategic role that our tertiary institutions can play in the PPP initiative. If I had my way, I would coin that acronym to PPTP (public-private-tertiary partnership). The model could safely be tried on the identified SEZs. It is my conviction that it could facilitate economic growth and achievement of the Zim Asset objectives.
In conclusion may I ask these questions now, “what happened to the idea of coming up with this ‘‘think tank’’ I mentioned above? “For how long will the debate on PPPs continue without a conclusion?” The SEZs can be a fertile ground for PPTP initiative for the success of the Zim Asset and economic growth.
Dr Bongani Ngwenya is a Bulawayo based Economist and Senior lecturer at Solusi University’s Post Graduate School of Business.
