 |
Using a SFA approach, this paper measured the efficiency of ports and electricity PPP investments respectively on container traffic and coverage rate by comparing the production frontiers with and without PPP investments. Furthermore, for the electricity sub-sector, the effect of PPP investments is analyzed alongside the different CPIA criteria used as proxies for the determinants of PPP investments. Thus, for the electricity sub-sector, we tested two hypotheses: i) whether PPP investments combined with the CPIA criteria shift the production frontiers ii) PPP investments together with CPIA criteria as a determinant of efficiency. For the Ports sub-sector, we first measured the effect of PPP investments on efficient production frontiers. Secondly, we analyzed the effect of CPIA criteria as determinants of inefficiency. For the Electricity sub-sector, the paper covers 34 SSA countries; that of Ports covers 18 countries. The analysis period for both sub-sectors is from 2000 to 2019.
Prior to analyzing the effectiveness of sectoral infrastructure investments, we identified, for each sub-sector, the CPIA criteria with a Granger non-causal relationship, to be able to use them as determinants of inefficiency.
For the electricity sub-sector, the tests identified two CPIA criteria: Financial Sector (c.5) and Quality of budgetary and financial management (c.13). Regarding shifting the efficient frontier, the results showed a positive contribution of the inputs: public, private investments and PPPs to access to electricity. However, the contribution of PPP investments to shifting the efficient frontier remains negligible. The results showed perfect efficiency when PPP investments in the electricity sector are considered. However, without these PPP investments, the results showed an average decline in efficiency of 1%. More importantly, we found that when PPP investments are combined with an CPIA criteria, its contribution to the electricity rate access remains significant and positive. As for the role of PPP investments as a determinant of inefficiency, the results showed that it contributes to improving access to electricity, as does criteria (c.5) financial sector. While criteria (c.13) contributes negatively to access to electricity. Finally, the results showed that countries have an average efficiency rate of 87% in terms of access to electricity. These efficiency scores are also widely dispersed, ranging from an average minimum over the analysis period of 61% for Liberia to an average maximum of 98% for Nigeria.
For the Ports sub-sector, three CPIA criteria were selected: Monetary Policy (c.1), Debt Policy (c.3) and Quality of Public Administration (c.15). In terms of shifting the efficient frontier, the results showed a significant and positive contribution of PPP sector investments to container traffic. The average inefficiency without PPP sector investments is 28%, while the average inefficiency with PPP is around 25%, i.e. a 3% improvement with PPP. Used as determinants of inefficiency, the Debt Policy (c.3) and Quality of Public Administration (c.15) contribute to improving the level of container traffic, while the Monetary Policy (c.1) criteria contributes negatively to container traffic.
The results obtained show a positive contribution from PPP investments in the ports and electricity sub-sectors.
