Reasons for adopting Public–Private Partnership (PPP) for construction projects in Ghana

TLDR

Public–Private Partnership policy has increasingly been adopted worldwide, including by the Ghanaian government, over the past decade. This paper investigates the key reasons for adopting PPP for construction projects in Ghana. An empirical questionnaire survey asked respondents to rate 17 literature‑derived reasons for PPP adoption. The study identifies five primary reasons—reduced administrative cost, shared risk, alleviated budget constraints, greater private sector mobility, and private sector funding capacity—while ANOVA shows that benefits to local economic development, market access, tax incentives, and new market penetration are viewed differently by public and private actors; factor analysis groups the 17 reasons into innovation and economic benefits, private sector efficiency, market penetration and innovation, risk management, and private sector growth incentives.

Abstract

Over the past decade, Public–Private Partnership Policy has increasingly been adopted by governments over the world and the Ghanaian Government is no exception. This paper explores the key reasons for adopting PPP for construction projects in Ghana. In an empirical questionnaire survey respondents were invited to rate their perception on 17 reasons identified from literature. The results show that five most important reasons for adopting PPP are: 'reduces public sector administrative cost', 'allows for shared risk', 'reduces the problem of public sector budget constraint', 'private sector possess better mobility' and 'private sector has ability to raise funds for project'. A significance test using one – way ANOVA indicates that 'offers benefit to local economic development', 'increase access to the public sector market', 'provides tax exemption and reduction' and 'provides incentives to new market penetration' receive different views from the public and private organizations as reasons for adopting PPP policy. Factor analysis also shows that the factor groupings for the 17 reasons are: innovation enhancement and economic benefits, private sector efficiency, opportunities for market penetration and innovation, effective project risk management and business growth incentives for the private sector.