Fragile states lag far behind the developing world and generally require more development assistance, as they are characterized by the negative impacts of conflict or natural disasters, which often leave infrastructure service provision underfunded, and in many cases, damaged or destroyed. Furthermore, the private sector is often hesitant to invest because of the heightened risks inherent in fragile states.
PPIAF specializes in creating enabling environments for public-private partnerships (PPPs) in basic infrastructure sectors, as well as early stage project conceptualization and pre-feasibility project development. This expertise allows PPIAF to work effectively in fragile states willing to tackle the challenges associated with increasing institutional capacity and sector reforms needed to attract private sector participation.
Weak institutions and high risks of conflict constrain national poverty reduction and service delivery in many fragile states. While all fragile states are characterized by weak policies and institutions, country context varies considerably and efforts to attract the private sector to such countries must be carefully designed to take this into account. PPPs may not be easily feasible in many fragile states, but legal/regulatory/policy reforms are often possible and can represent first steps on the road to improved infrastructure service provision through private participation.
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Liberia: Support to the Mobile Telecommunications Sector
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Background: Between 2002–2004 the Liberian transitional government bilaterally negotiated the issuing of mobile licenses to four operators, resulting in major discrepancies in the treatment of the operators and in license terms and conditions. The Telecommunications Act passed in 2007 required the “standardization” of these licenses to ensure a strong framework of license rights and obligations, a level playing field between different operators, and that consumers benefit from a fair and competitive environment. The Liberia Telecommunications Authority was made responsible for the re-negotiation of standardized license terms reflective of international best practice.
PPIAF’s contribution: In 2007 the government of Liberia requested PPIAF support to develop a comprehensive fee and taxation policy for telecommunications that would promote a competitive and dynamic sector, as well as improve access to information and communications technologies services to the citizens of Liberia.
Outcomes: PPIAF support to the mobile telecommunications sector led to the establishment of an appropriate framework of license rights, with uniform terms and conditions, the establishment of the legitimacy, authority, effectiveness, and credibility of the new regulatory regime, and the strengthening of the Liberia Telecommunications Authority and establishing its credibility and authority to implement the new Telecommunication Act.
Impacts: PPIAF’s support formed the building blocks for the standardization of the licenses of the four existing mobile operators in Liberia: Lonestar Communications Corporation, Comium, LiberCell, and Cellcom. This process concluded on April 24, 2009 with the issuance of four GSM licenses to these four mobile operators, who agreed to pay a total of US$65 million to the government of Liberia in license fees for the issuance of 15-year licenses. A payment schedule enabled the service providers to pay the license fees in installments in pre-determined amounts until 2019.
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