Corporate governance can act as a continuum for public-private pacts

Governance has been associated with formal institutions of government in the development and implementation of public policy.

While good corporate governance has meant working well where institutions function in transparency, the existence of efficient procedures and accountability are an indication of competency in both the public and private sectors.

The principles of good corporate governance have however been of concern in various regions of the world.

In Asia Pacific region, the United Nations Economic and Social Commission in 2007, had found that good corporate governance meant accountability, a consensus orientation, effectiveness and efficiency.

It also meant equity and inclusiveness, participation, responsiveness, rule of law as well as transparency.

In Europe, UN Economic Commission for Europe supported the model as a framework in facilitating the culture of cooperative risk sharing, mutual support, putting people first as well as transparency in public-private partnership (PPPs) that could help achieve sustainable development.

Private party

The PPPs have had success in Africa - more so in South Africa and Egypt according to World Bank 2012, PPPs reference guide.

There is however no internationally agreed definition of PPPS that exist.

It is however viewed as a long-term contract between a private party and a government agency for providing a public asset or service, in which the private party bears significant risk and management responsibility.

The PPP contracts can be between government institution and private party as well as the bridge between outsourcing and privatisation of services as a mitigation of the risks.

The practice of PPPs in South Africa as per Fourie, 2015 study had acknowledged presence of a cabinet taskforce of April 1997 and the Municipal Act of 2000.

Similarly, in Nigeria, there has been a legal framework for PPPs, and emphasis was even in the Public Procurement Act 2007, as per Odeleye, 2012 study.

In Nigeria, focus has been in health, public transport, tourism and ICT.

The education sector and agriculture have lagged behind in the bid to achieve vision 2020 for the country.

In Kenya, there had been a promise that 80  per cent of development was to be achieved through PPPs by 2030.

However, fewer institutions as in manufacturing, health, security or even housing are reporting to be embracing the PPPs model.

Elsewhere, especially in the Organisation for Economic Co-operation and Development (OECD) countries, success stories exist in PPPs initiatives.

The OECD, 2012 study found success as outcomes in risk- sharing, costing, contract-making, negotiation, affordability, budgeting as well as in accounting application.

Dispute resolution

 In addition, the emphasis has been for proper system to be put in place, an enhanced dispute resolution mechanism, contract signing enforcement and improved institutional capacity.

Others are the departments being out in place, concern on the life cycle of the project as well as the overall risks.

 In developed countries, emphasis is on value for money model , for instance in Australia; the Eastern States of Victoria, New South Wales and Queensland have embraced the PPPs model in infrastructure service delivery with good governance principles as per recent study of Levilt and Erickson, 2016.  

In conclusion, principles of good governance can be embedded in PPPs to solve all concerns of institutions and organisations as well as answer demand and supply constraints.

However, the way forward is to embrace the outcomes of PPPs with good corporate governance that can bring empowered institutions, strengthened systems, result–driven initiatives, risk-taking institutions and opportunity as well as be innovative in nature.

 Further, this can also promote better decision-making and the efficient use of resources, by strengthening accountability and the stewardship of the resources.

 

-CS Wandera is a member of the Institute of Certified Secretaries.