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Drivers of Value for Money in Infrastructure Projects in Africa

Author

Listed:
  • Joel Barnor
  • Odongo Kodongo

    (Wits Business School, University of the Witwatersrand, South Africa)

Abstract

With insufficient documentation of infrastructure projects and limited empirical evidence, African governments have no scientific guidance on the choice between private-public partnerships (PPPs) and traditional (TP) infrastructure procurement. Under these circumstances, it is unclear whether their choices maximize value for money (VfM) on infrastructure projects. This paper sought to develop a framework for assessing VfM, establish the factors that drive VfM, and ascertain what stakeholders consider to constitute VfM, for TP and PPP projects. By deploying structural equation modelling technology, we find that technical (e.g., efficient project scoping) and financial (e.g., efficient risk allocation) factors are important for VfM on PPP projects, while political (e.g. efficient procurement process) and social (e.g. environmental impact considerations) factors play a more crucial role for TP projects. Thus, while stakeholders make judgments about VfM for PPP projects from a technical and financial standpoint, for government projects they use a political and social lens to make similar judgment. Interestingly, we also find that consistency of a project with national and local development goals is the single most important VfM indicator for both PPP and TP infrastructure projects.

Suggested Citation

  • Joel Barnor & Odongo Kodongo, 2025. "Drivers of Value for Money in Infrastructure Projects in Africa," Review of Development Finance Journal, Chartered Institute of Development Finance, vol. 15(2), pages 62-82.
    • Handle: RePEc:afj:journ3:v:15:y:2025:i:2:p:62-82
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    File URL: https://journals.co.za/doi/abs/10.10520/ejc-rdfin_v15_n2_a5
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    Keywords

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    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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