The impact of public-private partnerships on Zambia's economic growth and economic development

Banda, Zondwayo

Title: The impact of public-private partnerships on Zambia's economic growth and economic development
Creator: Banda, Zondwayo
Subject: Public-private sector cooperation -- Economic aspects -- Zambia
Subject: Capital investments -- Zambia
Date Issued: 2021-12
Date: 2021-12
Type: Doctoral theses
Type: text
Identifier: http://hdl.handle.net/10948/53711
Identifier: vital:45717
Description: The current globalisation is pressuring both developed and developing nations to fast-track change and development with the intention of improving the living standards of the people. With limited financial resources and razor-thin budgets, national governments now turn to private sector to collaborate in financing infrastructure that is critical for economic and social growth. Despite the increase in public-private partnership (PPP) investments in Zambia, there have not been any formal assessments of the PPPs to evaluate their impact on Zambia’s economic growth and economic development. This research evaluates the impact of PPPs on Zambia’s economic growth (proxied by gross domestic product [GDP]) and economic development (proxied by unemployment, household consumption and Gini coefficient). The research adopts the auto-regressive distributed lag (ARDL) model as the time series approach to investigating the relationship between PPPs and gross domestic product (GDP) as well as the economic development. The ARDL model was also used for evaluating the impact of PPPs on Zambia’s GDP and economic development for the 18 years from 2000 to 2017. Thirty-two self-administered questionnaires (SAQs) were received and seven interviews were conducted with key research informants. The key research informants for both the SAQs and interviews were purposively selected to provide insights into the impact of PPPs on Zambia’s GDP and economic development. The ARDL model results have established that there is a stable and long-run relationship between PPPs and Zambia’s economic growth. Similarly, insights obtained from SAQs and interviews show that PPPs are not only important in Zambia but are related to economic growth. Therefore, Zambia should continue harnessing and promoting viable PPPs to enhance its economic growth. This also entails that private sector should continue providing financial resources and expertise to spur Zambia’s economic activities. Through the use of F-statistics, the ARDL model results reveal that PPPs are cointegrated with household consumption, unemployment and the Gini coefficient. As such the ARDL model results confirm the existence of a stable and long-run relationship between PPPs and economic development. The insights obtained from SAQs and interviews highlight that PPPs in Zambia are important. Furthermore, the insights from the key informants suggest that there is a relationship between PPPs and economic development. Hence, Zambia’s continued harnessing of PPP investments is pivotal in its quest to improve the living standards of ordinary people. Using long-run coefficients, the ARDL model results demonstrate that PPPs impact Zambia’s GDP positively. PPPs have spurred economic activities through the creation of businesses. Similarly, the insights from key informants demonstrate that PPPs relate positively to GDP. The overall results suggest that PPPs impact GDP positively. As PPPs impact GDP positively, the government of the Republic of Zambia should continue harnessing the PPP investments as a pro-poor model that bolsters economic activities and fosters economic growth. The harnessing of PPP investments means that the Zambian government, through its Finance Ministry, should scale up investments in PPPs and widen the scope of sectors for PPP investments so as to achieve inclusive and faster economic growth. The ARDL model results show that PPPs affect economic development positively through increases in household consumption and reductions in unemployment rates. However, the data on the Gini coefficient reveal that PPPs have a negative impact on economic development, as PPPs contributed to the rise in the Gini coefficient for the period under review. The key informants’ insights reveal that PPPs affect economic development positively by increasing household consumption and reducing the unemployment rate and the Gini coefficient. The mixed results on the Gini coefficient data representing income inequalities could be attributed to low-quality jobs and poor employment conditions created through PPP projects. Overall, the study’s results show that PPPs have a positive impact on economic development, as they have created businesses and employment thereby contributing to the increase in household consumption. Consequently, the Zambian government should continue engaging the private sector in PPP projects. The government should also scale up PPP investments and widen their scope to include other sectors of the economy as PPP present a viable option for the continued spurring of economic activities, the creation of employment and improvements in household consumption. The research results suggest that PPPs play an important role in improving economic growth and economic development thereby supporting the original intention of the PPP strategy for both developed and developing countries. The research strongly recommends the scaling up of investments in PPPs to contribute to the reduction or eradication of poverty in Zambia – and in other developing countries in Africa. The scaling up of PPP investments has implications that require attention from policy makers. There is a need for the development and dissemination of PPP policy guidelines to improve the design, development and implementation of PPPs in Zambia. The scaling up of investments in PPPs also requires changes to be made to the current PPP Act to widen the scope of PPP investments so as to include additional economic sectors to increase GDP, improve household consumption, create new jobs and reduce the Gini coefficient in Zambia. As PPP processes are complex, increased investments in PPPs will require further training of the PPP department’s staff, the contracting authorities and the private sector to improve their regulatory and technical capacity in the design, development and implementation of PPP projects.
Description: Thesis (PhD) -- Faculty of Business and Economic Sciences, 2021
Format: computer
Format: online resource
Format: pdf
Format: 1 online resource (xviii, 305 pages)
Publisher: Nelson Mandela University
Publisher: Faculty of Business and Economic Sciences
Language: English
Rights: rights holder
Rights: All Rights Reserved
Rights: Open Access

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