After independence up to the mid 1970s, the Government was able to provide infrastructure where it was needed through the use of public funds mainly generated from mineral tax when the mining sector and metal prices were favourable. However, when this trend became unfavourable, due to economic hardships and increased demand for social services, Government was not able to provide as much infrastructure as was needed through the use of public funds and the national budget as before. Economic hardships were mostly brought about by the oil crisis of the early 1970s which happened at a time when the price of Copper on the international markets was declining thereby reducing the export earnings base of the country. This resulted in the country experiencing huge balance of payments deficits, thus the need to secure borrowings from multilateral institutions was required. However, this led to high fiscal deficits for the country thereby creating an environment of macroeconomic instability.

The country’s economic situation was made worse after the Unilateral Declaration of Independence (UDI) in Southern Rhodesia which was heavily condemned at international political levels resulting in sanctions and commencement of liberation struggles within the region. Thus Zambia as a country was surrounded by countries with unstable political and social activities which adversely affected the economic growth of the country. As a result, there have been a lot of delays in completing public infrastructure projects. The number of projects which have been delayed or shelved have increased, resulting in backlog due to limited financial resources. In addition key infrastructure such as airports, railways, clinics, hospitals, schools, bridges and roads have not been maintained over the years resulting in a need for major rehabilitation to bring them back into acceptable conditions. The limited availability of such infrastructure has resulted in inefficiency of operations. This has in turn put pressure on Government to continue providing the services through external and internal borrowing, leading to Government accruing huge domestic and international debt.

From the early 1990s, the country embarked on economic liberalisation which entailed institutional set up and reform that led to market oriented policies and private sector investment. Over the years this has steadily led to macroeconomic stability thus resulting in continued investments in key sectors of the economy. However, like many countries particularly in the developing world/low income countries, the Zambian Government faces challenges in the delivery of public services and infrastructure. New infrastructure and services need to be provided and existing infrastructure rehabilitated and maintained to deliver public services more effectively and extend access to services to a greater number of the population than currently have access to these services.

To realise the possibility of using PPP’s, Government recognises the need to create the appropriate policy and provide the institutional and legal framework for encouraging the private sector to play a larger role in procuring and financing public infrastructure projects and services in the public sector through well designed PPPs. PPPs will provide Government with some relief in that it will not be required to invest 100 per cent (%) upfront in the project, as the private investor will take up significant risk by investing more in the project. Through PPP, the delivery of public infrastructure and services may be enhanced by creating a framework that would allow both the private sector and the public sector leverage on their abilities to manage and deliver such infrastructure and services through the use of financial, managerial, professional and technical expertise. The necessary maintenance and operation of infrastructure and related services may also be enhanced by leveraging on these resources. This allows public services to be delivered more efficiently and effectively, which allows Government resources to be channeled into other areas where direct public investment and intervention is required.