Public Private Partnership: Innovative, collaborative project financing giving Zanzibar fast facelift

Public-Private Partnership (PPP) has been identified as the easiest way to bring about development as governments and the private sector join forces for the purpose of delivering impactful infrastructure projects or services.

This arrangement is highly recommend by development partners such as the World Bank which recognizes that beyond broader economic effects. PPPs can benefit the poor through several channels, including by creating jobs or improving service provision in a targeted manner.

PPPs, if implemented well, can help overcome inadequate infrastructure that constrains economic growth, particularly in developing countries and stays as the best window opportunity providing access to resources.

As a developing territory, Zanzibar’s investment landscape has undergone remarkable transformation, creating a highly favorable climate for PPPs. And the world has a lot of experience to which Zanzibar can borrow to implement her own programs based on local available conditions.

With its rich cultural heritage, strategic location and robust legislative framework, Zanzibar has steadily emerged as a top destination for investors seeking high-impact and sustainable projects. The government’s commitment to fostering a business-friendly environment is evident through a series of legislative reforms, streamlined processes and a growing number of successful PPP projects.

These efforts showcase Zanzibar’s potential as a hub for innovation and infrastructure development, making it an attractive destination for private sector partnerships.

Emmanuel Mashimba is the Commissioner of Public Private Partnership in the President’s Office (Labour, Economic Affairs and Investment). We caught up with him to shed light on what Zanzibar looks like currently and its future when it comes to this new normal of achieving development.

He gave a background, saying that Zanzibar has long recognized the potential of PPPs as a tool for infrastructure development and service delivery with the foundation laid with the Concession Projects Act No.1 of 1999. However, the island’s PPP framework truly evolved with the enactment of the PPP Act No. 8 of 2015, followed by the PPP Regulations of 2017 and the PPP Policy of 2014.

“These efforts set the stage for successful collaboration between the public and private sectors, offering clear guidelines for project initiation, risk-sharing and management,” he said.

In response to growing investor interest and to facilitate an even more business-friendly environment, Mashimba said Zanzibar made two pivotal legislative amendments in recent years: the 2021 landmark amendment to the PPP Act which resulted in the creation of a dedicated Ministry responsible for Investment, formally known as the President’s Office (Labour, Economic Affairs and Investment) tasked with attracting and managing investment across Zanzibar.

The second amendment came in 2022 that opened door for unsolicited proposals, allowing private partners to bring forth their own innovative project ideas addressing public needs while enhancing efficiency.

“Crucially, this amendment introduced direct negotiation and awards for unsolicited proposals, removing the requirement for competition and further streamlining the process,” Mashimba said.

“By eliminating bureaucratic hurdles and simplifying approval procedures, Zanzibar has made it easier for private companies to invest in Government Projects. This approach not only accelerates project implementation but also encourages creative, out-of-the-box solutions from the private sector, making partnership framework more dynamic and responsive to the evolving needs of the country.”

Mashimba proudly mentioned five high-profile successful PPP projects that showcase the island’s potential for bigger things in the future. They include management and operation of Malindi Container Terminal and Maruhubi ICD.

“This project, involving an investment of USD 8.0 million, aims to modernize Zanzibar’s logistics infrastructure by upgrading the Malindi Container Terminal and Maruhubi Inland Container Depot. By improving trade connectivity and handling capacity, this project reinforces Zanzibar’s position as a regional trade hub,” he said.

Another is design, build, finance, operate, maintain and transfer of the new passenger ferry terminal at Mpigaduri with an investment of over USD 250.0 million. The project involves the design, build, finance, operation and maintenance of a new state-of-the-art passenger terminal at Mpigaduri. The terminal is expected to significantly boost tourism and facilitate easier access for residents and visitors alike, to and as well out of Zanzibar.

Management and operation of terminal three at Abeid Amani Karume International Airport is another project. With a USD 7.0 million investment, it focuses on efficient operation of the newly constructed Terminal three, ensuring it meets international standards for passenger service and operational efficiency, further boosting Zanzibar’s tourism potential.

The fourth project is design, build, finance, operate, maintain and transfer of the Fumba Port with an investment of USD 52.0 million. The project aims to enhance Zanzibar’s maritime infrastructure, improve port services and handling capacity. The project is meant to help facilitate the island’s growing trade needs and attract further investment.

The fifth project is rehabilitation, expansion, upgrade, innovation, financing, operation and maintenance of Mkoani Port with an investment of more than USD 11.0 million.

The project focuses on expanding and modernizing Mkoani Port, a key asset for Zanzibar’s maritime trade in Pemba Island. The project will enhance the island’s shipping capacity and logistics efficiency, explained the soft spoken Mashimba.

But what is behind Zanzibar’s success in attracting private sector investment through PPPs? According to Mashimba, there are other additional several key factors.

“Situated at the heart of the Indian Ocean, Zanzibar’s geographic location provides access to major international trade routes, making it an ideal hub for infrastructure, logistics and tourism investments, which Zanzibar has had that culture since the days of the trade winds.” he said.

“With tourism and trade as key drivers of the economy, Zanzibar is primed for projects that serve the growing demand for transport, hospitality and infrastructure, creating numerous opportunities for investors looking to tap into this rapidly developing market.”

Additionally, Mashimba observed that Zanzibar enjoys a stable political climate which provides a conducive environment for long-term investments.

Asked about the future of PPP investments in the isles, the Commissioner stated that Zanzibar has positioned itself as a leading destination for PPP investments through proactive reforms, investor friendly policies and a commitment to innovation, citing the recent legislative amendments to have not only simplified the investment process but also created new opportunities for private sector partners to collaborate with the government in shaping the future of the island’s infrastructure and economy.

Hissham Abdukadir

Mass Communication & PR Strategists (PR, Creative Content Design & Media Management)