Building Bridges: Finance, Policy, and People in African PPPs

In this episode of The Global Signal, we sit down with Advocate Jack Fungayi Matiza to explore the critical intersection of finance, policy, and people in shaping successful public-private partnerships (PPPs) across Africa.

From structuring bankable infrastructure projects to navigating the competing incentives of governments, DFIs, and private capital, this conversation dives into what actually determines whether PPPs succeed—or fail—over the long term.

We discuss:

1. How incentives differ across financing partners—and why that matters
2. Translating local development priorities into investable projects
3. The most underestimated risks in PPP execution
4. Accountability and performance after financial close
5. The role of natural resources in structuring deals
6. What truly sustainable, win-win PPPs look like in practice

Guest Bio: 

Jack Matiza is an award-winning public-private partnerships (PPP) expert, serving as Regional Manager at the P3 World Council and Country Director for Orion Infrastructure Africa, where he advises on the structuring, financing, and delivery of sustainable infrastructure projects across Africa. He is Chairman of the UNECE Africa Public-Private Partnerships Network (AP3N) and Founding Director of AA1 Academy, an accredited APMG CP3P training organization.

Jack holds an MBA in International Business and a Master’s Certificate in Sustainable Infrastructure Development and Finance, and is an APMG Certified PPP Professional (CP3P) and PRINCE2 Practitioner. He also serves as an ImPPPact Global SDG Alliance Ambassador for Zimbabwe, advancing effective public-private collaboration for sustainable development.

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Transcript

SPEAKER_02 0:00

Welcome to the Global Signal, a podcast exploring how emerging technologies, international policy, and financial markets are reshaping global power. I'm Joshua Charles.

SPEAKER_00 0:13

And I'm Benjamin Fields. Each episode we move beyond the headlines to examine the strategic dynamics that will matter not just this year, but decades from now.

SPEAKER_02 0:21

Our innovation from this competition, our capital flow's influence geopolitics, and where cooperation remains possible in a rapidly changing world. Let's get started. Jack Matizan, welcome to the Global Signal. Jack Matizan is a regional manager at the P3 World Council and the country director for Orion Infrastructure African, an infrastructure, investment, and transaction advisory firm focused on the African continent. He works on the design, structuring, financing, operations, and management of sustainable projects driving strategic growth across the region. He holds a master's certificate in sustainable infrastructure development and fundamentals from the School Link School of Business, York University, and an MBA in international business from the University of Salfic. Jack is a certified Prince II Project Management Practitioner and an APMG Certified Public Private Partnership Professional. In addition to his professional roles, Jack serves as an ambassador for the Impact Global SCG Alliance for Zimbabwe, advocating for sustainable development goals and fostering partnerships between the public and private sectors. He is passionate about creating positive social and environmental impact through his work with expertise in contract management, corporate governance, and government contracting. Jack, welcome to the show.

SPEAKER_01 2:08

Thank you very much, Joshua.

SPEAKER_02 2:10

And I'm glad to be joining you and thank you for the invite. As we will dive into, we'll touch upon a range of topics ranging from PPP structuring to due diligence gaps and even talking about sustainable development and natural resources. The first question we would like to ask you is with respect to financing partners and incentives. So, from your vantage point, how do the incentives and constraints differ between development finance institutions, commercial lenders, and host governments in PPPs? And how do those differences tend to affect project execution?

SPEAKER_01 3:00

Thank you very much, Joshua. That's a phenomena that is very vital for the success of public-private partnerships. As the name says, it's a partnership between the public sector and the government sector. And in every partnership, for it to be successful, both parties should be. I think it's a winner, it's something that we refer to as a winner. Everyone must be a winner, for lack of a better phrase. So in the partnership, everyone must be a winner. Otherwise, in any partnership, if it's a winner take all, or one winner takes more than the other partner, then that partnership is not sustainable. I normally give an example of a bed that when a bed is flying, it has two wings. Both wings must flap equally. So if another wing is not flapping properly, or the other is flapping more than the other, that bird cannot maintain its proper flight. And flying becomes a challenge, and it might not even fly. So the same with PPPs. When we say PPP, a successful PPP to be executed or to be successful, it means both public sector interests and private sector interests has to be catered for. And risks has to be shared between both parties in an equitable manner, that the risk has to be allocated to a party that is much more that is better positioned to manage the risk. So I'll come back again to uh if you allow me to just uh address this question, but coming from the definition of a public-private partnerships. So in a public uh private partnership, the first word we start there is public. So for the project to be successful, it must have a public interest at heart. It's not private public partnerships. My view, there's a good reason why it's public private partnerships. That's saying that we are starting with the public, the public, which is a people-centered or a people-oriented uh project. So I think that's the most important thing. That if if the project is something that is a required from a public uh perspective, which means that it is uh people-centered, it is people-oriented, it has a social benefit to the community, then uh that is a one uh that is that is the first uh pillar of ensuring that the project is successful. Incentives is the word says, it's an incentive. Uh to me and from my experience, an incentive is the icing that you put on a cake. Uh you in incentives don't make a a bad project good. No. The icing is not going to make a bad cake uh turn out to be a good cake, no. So incentives are things that we then put they are the cherry on top that we then put to a foundation that is repaired for success. That is a that has been developed to ensure that uh the project is successful. Once the project is successful, if the fundamentals are right, then the incentives can then kick in. But if the fundamentals are wrong, incentives are not going to make the project successful. That is a from my experience and my exposure that I've I've had uh so far. So it's important to get the fundamentals right uh before we focus on uh incentives. I have advised a couple of African governments and in also in other uh emerging economies. And when you sit down with them, you find that there's so much emphasis on no, we need to create more incentives to attract private sector investment. We need to, but uh my view has always been that no, incentives is the last thing that you must be worried about. Look at the fundamentals first. Do you have an environment that if there's a contractual dispute, both parties feel confident of taking that dispute through your systems and uh they are confident that the outcome would be free from bias. If that is not there, uh putting an incentive is not going to make any sense because you know, if there's a dispute, uh the outcome is more likely to be not as transparent or not as impartial. So there is a lack of confidence in the rule of law in the environment. So getting that first it's a partnership. So if there's a partnership, if there's a dispute, both partners should feel very safe to use your legal instruments that are there, be it your courts, be it your arbitration, be it your dispute resolution processes, that these are going to work in terms of what of resolving that dispute. If that is not in place, we might have a lot of incentives. But if that not if that is not in place, it means that if if you put your incentive on paper today and tomorrow you withdraw it, and if I then period, it will go through a dispute resolution process that is biased. So the incentive will then lose its what the incentive would then lose its its its value. Yeah, so I think that that's without belaboring the point, incentives come through at the end, but the start is making sure that the fundamentals are right from a government point of view. They just to then look at what incentives they can look at, or what incentives they can then concentrate on. After getting these fundamentals right, the rule of law, the legal framework for the PPPs, making sure that there is certainty in the laws. No one who's going to invest in an environment where laws can just be changed tomorrow, uh, when you have made a commitment for 25 years, because a PPP is a long-term contract, looking at about seven, ten years going up. So if you have made a commitment that no, look, uh we are going to build this bridge and we are going to recoup our money from a tow rod or from a tow gate. And then and and we have agreed that uh in the next 20 years, you're not going to develop another competition to this a bridge so that we can be able to recoup our money. And then the next year the other government then comes and says, No, no, no, look, that's too expensive. We are going to appoint another contractor to build another one next to you so they can compete. Then it then defeats what the business objective, the commercial uh viability of that. So at a very high level, for a PPP to be successful, like we said, it's two wings of a bed from the government side, which is the first the public side, it's value for money. What value does it bring? The project must bring more value for money to the people, which starts by saying that is the project needed. You don't want to be building white elephants. But it's like going to a very low economic uh demographic uh area and then building a high-end shop that the celebrities will shop, and then you call that development. It's not development because the local that that local no one affords to buy anything from that shop. The only thing that they can then think of is then probably working in the shop. That's the only thing, yeah. So there is employment opportunity, but in terms of then uh providing uh services to that community, it's not providing any service to that community. Uh, you are in Africa, the the the it's in a peasant, it's in a peasant uh community, and then you put in airport. So the airport, in terms of then uh making sure that the people standard of living improves, it's basically going to be for those in the tourism sector and a connectivity, but half of the people there don't uh can't afford to use the aeroplanes uh that will be parking there, so it might end up being a white elephant. So for PPPs, we need to make sure that there's value for people, there's value for money in the projects that we do. Uh, what benefit is it bringing to the community? Is it something that the community wants in that to get the value for?

SPEAKER_00 12:07

So moving on, we're talking specifically about the African context. And the reason why I was super excited for this particular podcast episode is because you're from Zimbabwe, an African country, and you have a really big say and you have a really big impact on what's going on. And you can see the beautiful expression and the way in which you go about things by the metaphors that you use to explain what's going on in these PPPs. And so I personally do research on like the real estate environment in Cameroon. And the reason why I'm doing it is because there's certain mechanisms and things you need in order to make sure that business transactions can go through well. Like you talked about property rights, um, you talked about contract enforcement, um, you talked about formal rules, laws, and structures, and then the ability to litigate those in the case that there's issues. And so, in particular, um, what mechanisms do you see that are successful in translating these local development priorities? And the ones that you were talking about, um, that are let's say they're democratically voted on, how do we translate those? What mechanisms turn those into bankable project structures?

SPEAKER_01 13:11

I fully agree with you. It's a continuation from the the first one. Because if the project is not bankable, then there's no there's no project. And then we take it a little bit uh back to say what's bankability. It's the appetite of the lenders or those with finance to lend the project. So if there's no one who is willing to lend that project, it is it's just as a concept, it will not see the light of day. So you need to structure your projects in such a way that it is able to attract uh financiers, and that is the bankability question. But what that financiers are looking for. The first question is that if we put in money, uh are we going to be able to is the project going to be able to generate enough revenues to firstly pay back the debt, uh run the operations, and then give dividends to the shareholders of that uh project? As you are aware, PPP is run mainly on a project finance concept, which means that lenders are not looking at the historical or the assets of the project sponsors, but they are mainly looking at the project itself. Is the project able to then generate enough revenues to then pay pay them back plus their interest and continue operating and also pay the sponsors that have put in what that is that have put in uh their their their um their equity as a shareholders of of that spv. For that to to materialize for the project to have uh bankability, it has it has to be able to get that uh that return on investment. It's one of the things that uh we then look at. In terms of uh mechanisms of getting that, uh we then look at what is the affordability because in PPPs, it can be paid in two ways. A private sector puts in their money, uh, the project gets built, and then government then pays for the service uh over a period of time. But that payment actually covers everything uh in terms of construction and uh operation, but it just comes off as one payment that covers both. Normally, what you call a unitary payments, where the government makes a payment to cater what for the services that the private partner would be uh giving to the community. Examples of that, I think in South Africa, if you're following this there's a very popular uh article or news article that came out, I think probably two years ago, of Tabo Bester. He was he he escaped from a maximum prison. If you then look at that prison, it's a it's a PPP project in which uh I think a British company, I can't remember which company was that, built that prison. But because you can't then charge prisoners when they are in prison, so government makes payments every year for the next 25 years before the prison can then do what transferred to government. There's also hospital, so that's just an example of a PPP where government pays. So for it to be bankable, then the private sector then says, Does the government have enough capacity to be making these payments? Yes. So we can bring in our money, but will the government be able to pay us over the next 25 years? That's the question. If we bring in our money, most of the time this money is not available locally, it comes from global uh lenders, so it will come as foreign exchange, it will come as US dollars. But when government makes this payment, most of the time it will be what local currency. So I come from Zimbabwe, and I think one of uh in the last 15 or 20 years or so, uh a loaf of bread at I think at one stage was about 5 trillion, if I'm not mistaken, because of inflation. There are various uh we're not going to what was the cause of that, but there was the local currency stability was a big issue. So for bankability, lenders will then look into that. That okay, if we bring in our money, we develop this, when we are recouping our money, what is the stability of the local currency? How are we going to deal with the issue of devaluation of that local currency over the last 25 years? You know, even big economies also struggle with this. When I went to South Africa, I think it was 2006, it was about one US dollar was equal to five runs, which is the South African currency. By the time I left, which was up, I think after 20 years, it was now one US dollar was now equal to 20 runs. And South Africa, remember South Africa, this is one of the biggest economies in Africa. So if it's like that in South Africa, then you can imagine Zimbabwe. You can imagine Zambia, you can imagine Gambia, the other smaller economies. If if if if that's what happens in a big economy like South Africa. So lenders will then look into that to say foreign currency risk. So how do you then make projects thankable? From my experience, you then focus on projects that the revenue stream comes in hard currency. Which type of projects like that like that? Airports, border development projects. I think Zimbabwe now, uh, with all its issues in terms of the economy and the currency and what they've one of the best uh PPPs in terms of a border post that was done. But if you look at the structure, it's because the revenue is coming in what? In US dollars. So that's one way that you are guaranteed that if you then make sure that you focus on projects which uh the revenue stream from either user payments or government payments is going to come in US dollars, then it eliminates the risk of a forex of local currency devaluation or fluctuations. It's more like a hedging uh mechanism, but that that's that that's the most practical uh way to make sure that your project you do you do with a project where uh the revenues are going to come in in high currency and not uh the local currency. Definitely.

SPEAKER_02 20:01

And and and you touch upon uh you touch upon one of the most fundamental risks when it comes to uh project fundamentals and just something that a lot of institutional investors think about when it comes to um fundamental projects in emerging and frontier markets, whether it be in African, Latin American, Asian, or the Middle East. It's the fact that there can sometimes be a momentum and the volatility with a local currency, whether it be the Nigerian number or whether it be Kenyan shillings. There are also other risks to to consider that we all are well aware of from political, technical, uh social risk and and the like. Um and so I'm curious to know which risks are most frequently underestimated and fundamental claims from those that we've discussed, as well as other fundamental risks that you that you can think about, such as repatriation risk and which stakeholders are best positioned to surface those risks earlier. We really want people to think about solutions here. Um, minimum, I think so many individuals, when they have the opportunity to talk to someone like yourself, they're very keen to know about uh some of the problems, but it's really about thorough stakeholder engagement and strategic partnerships that can mitigate some of these risks.

SPEAKER_01 21:39

And I think I fully concur with you with your view there that uh in terms of the risk, what I think the one risk that is mainly overlooked at financial closure or even at um the feasibility stage is the demand risk. Yes, because. For infrastructure PPPs, it's a business model. The infrastructure that we are developing needs to pay for its development. And how does it pay for its development? It pays for its development through usage. So if there's no one to use it, then it means that it won't be able to pay for its usage. So the most uh I think important risk that determines whether the project is going to be successful or not, it's the demand risk. And if that demand risk is not uh structured properly, I can I think studies have shown that uh if demand risk is not uh structured properly, you you almost likely to have an issue in terms of success. It's it's it's most likely not to be successful. So, how do you then uh ensure that this demand risk is handled uh in a manner that uh enhances project success and project uh sustainability? I will go back to what I said when we're starting, that it's public, private partnership, not private public partnership. So the question is who needs this project? It's the public. So we are starting from a point where you're saying that okay, government needs this project. If government or the people, because the government is the people. So if the people don't need this project, we must just stop there and say, no, look, this project is not necessary, let's go on to the next. Why? Because if you then implement a project that the people don't need, the service that the people don't need, uh, the government don't need that, it means that project is not going to be used. And uh there's not going to be whether government pays or user pay. If it's government pay, I can guarantee you after five or so, someone is going to say, Ah, but we are paying so much for something that is not being used. So it's fruitless expenditure. So one way or the other, that project is going to be terminated and there's going to be disputes or renegotiation or something like that. If it's user pay, you then find out that uh if people are not interested in it, no one is going to use it because it's not value to them. People would use their income to things that are more uh valuable to them. So you look at you you look at uh the demand risk, and uh also you also then look at the affordability from government side. Does government have enough resources to pay from the people side, do the people or the users have enough uh income to pay for that service, that quality? And besides that, you also then look at the willingness. I have a very good example of another project that we went in that I was aware of in South Africa, it was electronic tolls. The people simply refused to pay those electronic pay tolls up until government has to scrap them. They received legal letters, legal notices, and what, but there was just so much public pushback that we are not going to accept the electronic tolls. So if you then look at that, you see that okay, it's not a question of uh affordability in terms of means to pay, because these electronic targets were in Johannesburg, which is one of the richest cities in Africa. So definitely people could pay, but the issue was the willingness to pay. So you need to look at that as well. And and uh when you are doing feasibility, most of the time the view is that no, if people have the money, they will pay for it. No one really looks at, but are they willing to pay for it? Besides having the money, are they willing to pay for that service? So that is a very good example where the people could afford, but they were not willing to pay for that service. And if people are not willing to pay for that service, uh remember our governments uh in democratic economies, they go to elections to get their mandate from the people. So if you then proceed pushing something that uh the people don't want to pay for, it makes the governments, the incumbent governments, unpopular. And uh you must remember that politicians are driven by it's it's it's democracy. So you need to do popular policies and projects so that you can get in a mandate at the next election. So it became more like an election issue. So if it's something if something then tempers with elections, then the next thing you decide rather discontinue the project so that uh you don't create an unpopular government or something to that effect. So the willingness to pay is something that has to be looked at, uh, not just uh the ability to pay. From a government side, uh, you also then look at to say that in terms of their budget, do they have uh enough budget resources uh to pay for that? And then uh the usage, the utility, do people need to use that uh facility? And uh where where you see that people need to use the facility, but there is no means to pay uh for that facility, then you need to then introduce a some minimum usage or minimum volume guarantees where the government can then say, Okay, look for this project to be viable, you need a certain number of users. So we can give you a guarantee that in the event that uh there are less than so many numbers, so many users we will then pay the difference between those that have actually used and the minimum threshold that you require for the project to be commercially viable. So you then give a minimum volume uh guarantees. This is a mechanism that has worked, and uh it's one of the very uh uh effective ways of dealing with with a demand risk.

SPEAKER_00 28:11

You talked about these mechanisms, and I think this kind of partially answers this question, but you know, just super briefly, um, once a PPP reaches a financial close, what factors do you think we can look back on strongly determine whether or not the obligations were met over the life of the project?

SPEAKER_01 28:29

Okay. So once it has reached a financial clause, it then goes into the development uh phase. If it's infrastructure, the construction phase, and then after the construction phase, it goes into the operational phase. And at the end of the term, then it goes back to government, it goes back to it's handed over, the facilities handed over to government. So at financial clause, for us to then be sure that uh we have achieved the objectives. I think we we it's we do a value for money assessment at that stage to then see that okay, if if we had implemented this project uh using other forms of procurement, are we getting more value for money as a PPP, or are we getting a the better value implementing it locally? I mean with traditional procurement. So the value for money assessment, the cost-benefit analysis, how much does it cost us to implement this project as a PPP? Remember, there's a popular but mistaken uh view that PPP is free money and PPPs are cheap. PPPs are expensive uh and they take time. So for you to just move from conception to financial closure, you're looking at average 12 to 18 months because there has to be a pre-feasibility stage and then a full feasibility, and that full feasibility requires financial, technical, social, legal, environmental, and all these 95% of the time, government does not have resources for that. So it means they have to pay for specialized consultants, and that needs money. So if you're going to go traditional, you find traditional projects, a procurement is probably three months, and then a construction another 18 months. So within a two-year project, two-year period, under traditional procurement, they might be on the ground or already finished if they have the money. But in PPP projects, you can go for two years and you have nothing to show for it besides reports and analysis and feasibility of which the public sector, the people want to see dust on the ground, they want to see yellow, yellow machines on the ground. So that's the that's that's that's I think the other uh perspective that we we we look at. That PPPs are not always cheap, they are expensive and they take time. So we need to do a value for money analysis, we need to do a cost-benefit analysis. And if the cost-benefit analysis says that this is the best uh way to achieve the highest value for money, then we can go for them. It's not that all projects should be implemented as PPPs, it's not a one-size fit-all.

SPEAKER_02 31:28

Definitely, definitely. And I think there needs to be more speed or more efficiency when it comes to initiating these projects, and clearly there's a lot of work to be done to get to that point. But I think it's a matter of how can we engage the individuals who have the proper expertise to help take a project from idea to actual assumption, um, um, um, um, I'm optimistic, a minimum learning strategic objectives. Whether it be members of development priorities of different governments with the investment agendas of these institutional investors, the project sponsors, and um, um, um, and the limit. And so the question, um, I wish we had some sort of number or associate on the club to give us a less memorable because this is a really um dynamic topic. When we're getting the topic of natural resources and PPP design as well as sustainable development and mutual benefit, a lot of these countries in African um um resource rich, such as Democratic Republic, if come to African um lumbian when thinking of leverage these natural resources to incorporate them into problems and fundamental structures, how can this be done effectively? What are the considerations that matter most for ensuring long-term value for all parties and what does a genuinely sustainable PPP look like in practice? One that aligns commercial returns with long-term development outcomes, while of course ensuring the the risk involved in the transaction from financial to political to social are all accounted for.

SPEAKER_01 33:27

And I think it strikes at the crux of uh the development agenda itself. Uh remembering that uh public-private partnerships are a tool in the government's uh toolbox for procurement of infrastructure or public infrastructure. So as a tool, it means that it must be used uh in a way that achieves the objective of government. If you use it in uh incorrectly, it becomes then a double-edged sword. So they are there are what we call unintended consequences in which the people that is supposed to benefit are actually the ones that are left more impoverished by the project. So when it comes to natural resources, I think it's a very it's a very uh important topic because these natural resources are not infinite. Natural resources are they are not perishable, but they are depletable. So when investment comes through, uh there is a need to make sure that those that are custodians uh of that of those natural resources uh attract investment that ensures that future generations would not feel like we we sold the families pieces of silver. Because after after 25 years, uh someone is going to be in Zambia and say, Okay, look, but we have so much copper, but uh where is our copper going? What are we benefiting from our copper? Someone in Nigeria is going to say, Look, but we have so many oil fields, but we don't have fuel. Oh, fuel is so expensive. What is that fuel brought to us? Someone in Zimbabwe is going to say, but we have so many diamonds. What is what what development has the diamonds brought to us? So uh it's going back a little bit. I think the United Nations has a right which they call the right to development. It's not very, I think my personal view is I think it's something that's not well spoken about. And people, when we speak of human rights, uh the right to development, I I hardly hear it coming out, but I think it's at the crux of that. It says that people have a right to benefit uh from the natural resources in their geographic area. So if there is a resources in a certain country, the people of that country, it is their human right, the same way they have a right to vote, they have a right to benefit from the use or the exploitation of those natural resources for their own development. It's part of what it's part of the right to development. So it's it's something that I think uh going forward, if our public sector and uh academia and non-governmental make more discussions like this to then say, look, but look, the people actually have a right to make sure that they benefit from the natural resources. So if people have a right, if there are contracts that ensure that the rights are being exploited, I mean the natural resources are being exploited in a manner that that denies or deprives the local communities from benefiting for natural resources, then it then should become an issue of an infringement to the basic human right for rights to development, in which international organizations and international uh uh platforms should should be able to then say no look, such a PPP or such a contract is not valid or is not is not legally compliant. Just like if you have a contract for employing children that are under 16, people say no, look, that that is against IA law, it's it's it's it's it's child labor. So that contract is invalid. So I think if we then focus more on on that right to development and then looking at the contracts, the investment contracts, the PPP projects that have been entered by various uh countries to see are the uh are the countries benefiting from their resources? If not, then there should be a legal framework of then challenging those contracts and ensuring that if they are brought into compliance with uh with that.

SPEAKER_02 37:59

I I hear you, John. I think there is so much that we can talk about when it comes to sustainable development and a mutual benefit. Do you have any last-minute thoughts to share with guests in a quick 30 to 45 seconds that you would like them to know?

SPEAKER_01 38:19

Thank you, Joshua. I think it's a putting shot. Uh PPPs should be in a uh a catalyst of achieving SDGs. So we should look at uh people first PPPs, PPPs that prioritize the needs of uh the people first uh to ensure that uh we achieve the global SDG goals. Thank you.

SPEAKER_02 38:43

Jack Matiza, it's been a pleasure to have you on this episode of the Global Signal. We are very much appreciative of your time and the expertise that you have shared, not only with us, but also with our guests.

SPEAKER_01 38:56

Thank you. Thank you, thank you very much, uh Josh. Thank you so much, Bench, and thank you to the audience as well.

SPEAKER_00 39:03

Thank you. It was lovely to have you. I learned so much, and um, I look forward to when we schedule the next panel.