The use of Official Development
Assistance (ODA) in the
Development of Public Private
Partnership(PPP) Projects
The Case of Zambia
A presentation made at a workshop on “African trade unions as actors in
development”
Dakar, Senegal, 23 November 2015.
By Grayson Koyi
Institute of Economic and Social Research, University of Zambia.
2
Structure of Presentation
 Introduction
 Country Development Context
 Institutional and legal Framework for PPPs in Zambia
 ODA Flows to Zambia
 Case study: preliminary findings
 Case description
 Case justification
 Employment creation
 Employment relations
 Respect of international labour standards
 Respect of national labour laws
 Preliminary conclusion and recommendations
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Introduction
 The development of public-private partnerships is increasingly been seen as a
way of ensuring that private sector can contribute
 both directly and indirect to poverty reduction, job creation and national
development (OECD, 2015).

focus of ODA is being shifted from the public to the private sector through finance
blending mechanisms.
 Public Private Partnerships (PPPs) may be considered as a new concept in
Zambia,
 But, the country has progressed quite early
 launching a PPP Policy in 2008
 enacting an Act of Parliament in 2009.
 Several PPP projects have already been implemented in various sectors
 mainly in agriculture, health, transport and energy.
 The particular interest of this study, however, was:
 PPPs that are beneficiaries of ODA .
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Introduction
 The case study discussed offers evidence from a developing
country context of experiences with ODA financed PPPs.
 It focusses on African Banking Corporation Zambia (BancABC)
 A banking firm in the financial services sector in Zambia that received a
US$3.5 million equity investment from Norfund in 2011.
 Key guiding questions:
 To what extent has Norfund’s loan facility to the bank contributed to
employment creation and respect of labour rights and compliance with
national labour laws and International labour standards by the
beneficiary firm?
 What have been the overall development results and impacts on
communities of this ODA-PPP project?
 To what extent have trade unions being involved in decision-making on
PPPs in development and how can that role be enhanced?
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Country context: Positive Macroeconomic Trends
6
Country Context: High Rural Poverty
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Institutional and legal framework
 The 2009 PPP Act determines and establishes a number of institutions to be involved in
various processes of PPPs.
 PPP Unit at the Ministry of Finance and National Planning is in charge of the implementation of PPPs,
 The PPP Council formulate policies relating to PPPs and is an approval body for PPP projects.
 A Technical Committee exists, plays an advisory role to the Council on technical matters.
 Composition of technical committee includes government departments and representatives from
professional bodies
 There is no representation of labour on the technical committee, however.
 A legal framework exists
 The PPP Act No. 14 of 2009 regulates not only matters on the institutional structure related to PPPs,
but deals with issues governing project identification and feasibility studies as well as the
competitive selection process
 Scope of legal framework limited, however.
 Appears non-responsive to ODA financed PPP
 Institutional capacity to ensure its enforcement remain weak
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ODA flows to Zambia declining but remains significant
9
ODA received as percentage of government expenses
has declined steeply
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Case study preliminary findings
 Case description
 African Banking Corporation Zambia (BancABC) is a retail bank operating in the
financial services sector with more than 50,000 clients and about 200 employees.
 It is a foreign owned bank operating in Zambia and across a number of
countries in Africa
 It’s headquarters are in Botswana
 The bank is a beneficiary of an investment loan from Norway's Norfund.
 The five-year loan agreement to the tune of NOK 29.9 million (i.e. USD 5.3
million) was signed on 1st December, 2011.
 The loan facility was approved after a full on-site credit review performed by
Norfund in May 2011.
 The full scope of the review still being examined to determine whether it
included labour dimensions
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Case study preliminary findings
Case study justification
The project has been running for over four years.
 This enables ample time to relate to possible impacts and interact with
various dimensions of the current debate.
The project qualifies as a PPP using ODA funds.
 It is a recipient of a Norfund loan.
The amount of the investment loan is sizeable, US$5.3 million
The bank also has a nation spread
this enable an appreciation of its national development impacts
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Case study preliminary findings
 Employment creation
 The Bank reports a workforce of about 200 nation-wide
 An assessment of how employment dynamics have changed
due to Norfund loan investment yet to be determined
Challenges being experienced with access to this dataset
Secrecy issues
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Case study preliminary findings
 Employment relations
 Until September 2015, the basis of employment relations was the Human Capital Manual.
 However, with the recent change in the shareholding structure, the new owners have
assumed an open door policy towards collectivised employee relations
 The new management has since September 2015 signed a recognition agreement with the
Zambia Union of Financial and Allied Workers Union (ZUFIAW ).
 Union has already prepared their claims and demands for improved terms and
conditions
 Proposals for improving the Human Capital Manual have also been made
 With the absence of a collective bargaining mechanism, salaries remain an individual secret
for workers.
 What was apparent was that terms and conditions of service were individualised to the
point where employees performing similar functions and with similar qualifications did
not necessarily earn similar wages nor served on similar conditions of service.
 This leaves workers vulnerable to exploitation .
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Case study preliminary findings
 Respect for International labour standards
 Until September 2015, workers in the bank did not enjoy some fundamental
principles and rights at work as enshrined in International Labour Standards,
particularly ILO Convention No. 87 (freedom of association and protection
of the right to organise Convention, 1948) and
Convention No.98 (right to organise and collective bargaining convention,
1949).
Table 2 on the next slide illustrates the extent to which the company
has been in compliance with the eight fundamental ILO Conventions
that Zambia has since ratified and are in force .
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Case study preliminary findings
Conventions
1
2
3
4
5
6
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C029 - Forced Labour Convention,
1930 (No. 29)
C087 - Freedom of Association and
Protection of the Right to Organise
Convention, 1948 (No. 87)
C098 - Right to Organise and
Collective Bargaining Convention,
1949 (No. 98)
C100 - Equal Remuneration
Convention, 1951 (No. 100)
C105 - Abolition of Forced Labour
Convention, 1957 (No. 105)
C111 - Discrimination (Employment
and Occupation) Convention, 1958
(No. 111)
C138 - Minimum Age Convention,
1973 (No. 138)Minimum age specified:
Date
Ratified
02 Dec
1964
02 Sep
1996
Status
Bank Compliance
In force
Yes
In force
Yes, Recognition agreement granted to
the union in September 2015
02 Sep
1996
In force
20 Jun
1972
In force
22 Feb
1965
23 Oct
1979
In force
No, currently no collective bargaining
taking place. Preparation to commerce
first ever negotiation underway.
Yes, though issues of transparency
around salaries and other decision
making processes remain
Yes
In force
Yes
09 Feb
1976
In force
Yes
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Preliminary Conclusions
 After a preliminary analysis, the study found no evidence of improved
employment outcomes due to Norfund’s investment loan to African Banking
Corporation Zambia (BancABC Zambia). Further analysis of existing datasets
may be necessary to establish clear evidence of employment and national
tax revenue impact, however.
 Available data and analysis on employment relations pointed to recent
improvements but also uncovered failure to respect the international labour
standard on collective bargaining since collective bargaining negotiation
was yet to be operationalized.
 Available data and analysis also established that the trade unions have not
been involved in decision-making on PPPs in development.
 Against these findings, the paper reaches a preliminary conclusion that
development impacts of this project are unclear and that the trade union
capacity to understand and participate in decision-making process on PPPs
needs to be enhanced.
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Preliminary Recommendations
 To Government
 Strengthen the PPP legal framework to make it response to the ODA financed PPPs
 To DFIs/development partners,
 Align development finance to developing countries’ investment priorities.
 Make development outcomes the overriding criteria for project selection and evaluation
 Target domestically-owned companies as a preferred option for ODA financed private investment
whenever possible
 Set clear transparency and accountability targets for ensuring monitoring and accountability to
local stakeholders
 To trade unions
 Undertake a pro-active agenda towards the use of ODA in PPPs
 Demand for space and involvement in the PPP institutional framework in Zambia
 Raise awareness around the rights of workers, including the right to collective bargaining for
BankABC employees
 Establish union structures across all BancABC outlets