Don’t rush into PPP projects — Vish Ashiagbor to govt

SENIOR Country Partner of PwC Ghana, Vish Ashiagbor, has said that while Public-Private Partnerships (PPPs) offer significant opportunities for development, they require careful planning and execution to succeed.

He said the complex nature of these partnerships demands thorough preparation and a clear understanding of the long-term commitments involved.

The discussion of sustainable development and PPPs in Ghana has evolved significantly since 2008, with a major milestone being the passage of the PPP Act in 2020. This legislation finally provided a clear legal framework for defining and implementing PPP projects in the country.

Speaking at the Graphic Business/Stanbic Bank Breakfast Meeting in Accra, he said PPPs were inherently complex, costly and time-consuming to develop properly and therefore cautioned against attempts to rush or oversimplify these intricate arrangements, noting that hasty implementation often leads to project failure.

The first quarter edition of the Graphic Business/Stanbic Bank Breakfast Meeting last Tuesday in Accra, was on the theme: “Public-Private Sector Partnership, Financing Option for Sustainable Development."

The event brought together stakeholders, including private sector players and trade associations, bilateral development trade partners and various chambers of commerce operating in Ghana, to discuss how the government can use PPPs to finance national projects and developments.

Addressing complexities

Mr Ashiagbor said a key consideration in PPP development was the need to avoid adding unnecessary layers of complexity to already complicated structures. 

He said the sustainability of PPP projects hinged on their ability to address long-term public needs rather than temporary demands. 

This, he said, required careful analysis and planning to ensure that investments deliver lasting value to communities and stakeholders.

“Value for money considerations must remain at the forefront of PPP design and implementation. This involves conducting thorough assessments to prove project viability and ensure that public resources are being utilised effectively.”

“Rather than viewing PPPs as simple procurement exercises, they should be understood as long-term commercial relationships between the public and private sectors. This perspective helps ensure that both parties approach the partnership with appropriate commitment and understanding,” he said.

Govt’s role

He said government entities must be particularly clear about their roles and responsibilities within these partnerships. 

This includes a realistic assessment of their capabilities to fulfil their obligations and manage their share of the risks.

Mr Ashiagbor said the success of PPP projects often depends on the government's ability to maintain consistent support and engagement throughout the project lifecycle. 

He said this required sustained political will and institutional capacity.

He added that proper risk allocation between public and private partners was crucial for project success. 

The Senior Country Partner said this involved careful analysis of who was best positioned to manage different types of risks and establishing clear mechanisms for risk sharing.

“Financial viability assessments must go beyond initial capital requirements to consider long-term operational and maintenance costs. This comprehensive approach helps prevent future financial struggles that could compromise project sustainability.”

“Regular monitoring and evaluation frameworks need to be established from the outset to track project performance and ensure accountability. This allows for timely interventions if issues arise during implementation,” he explained.

Commitment 

Mr Ashiagbor said government commitment and support were crucial for PPP success, whether through financing, regulatory support or efficient administrative processes.

He said debt guarantees often play a role in PPP financing arrangements, particularly when commercial lenders are involved in the consortium.

“The framework for PPPs in Ghana has evolved significantly, with the 2020 Act providing clearer guidelines for implementation.”

“PPPs must be carefully structured to ensure they contribute to sustainable development goals while maintaining financial viability,” he stated.

He said the success of PPP projects depended on both partners fulfilling their commitments and responsibilities effectively.

He added that regular monitoring and evaluation of PPP projects were also essential to ensure they meet their intended objectives and provide value for money.