The Vice President, Professor Yemi Osinbajo, says the only way to effectively address the massive infrastructure deficit in Nigeria is by Public-Private Partnership (PPP) arrangement in one form or the other.
Professor Osinbajo stated this on Wednesday at the opening of a two-day retreat of the National Council on Privatization (NCP).
The retreat will, among other things, deliberate on the proposed amendment of the Public Enterprises (Privatization & Commercialization) Act 1999.
Citing statistics from Nigerian Integrated Infrastructure Masterplan (NIIMP) and the Economic Recovery and Growth Plan (ERGP) 2017-2020 to buttress his point, the Vice President said that “Nigeria will require at least $2.3 trillion over the next 30 years to bridge this gap.
“The review of budgetary allocation for capital expenditure even over the past decade will show that government resources are completely insufficient for this purpose.”
Professor Osinbajo said that while government could take either commercial or concessionary loans for infrastructure development, it would be an additional burden on a usually considerably leveraged balance sheet.
He said: “There is a large pool of investable funds from both local and international investors for the development and maintenance of infrastructure…But these are only accessible where there is a business case to be made for developing public infrastructure.
“So, for both institutional and individual investors, there is far more comfort with lending or with equity participation where a private sector entity partners with a public authority owner of the infrastructure.
“This way the public partner can play its natural role of a regulator (regulation and policy), leaving business to the private sector whose reason for being is business. So, for investors, PPP presents the best of both worlds.”
He urged participants drawn from the private and public sectors at the retreat to remain focused on the objectives of the meeting.
Professor Osinbajo also emphasised that developing a framework that would be attractive to investors should be topmost in their deliberations.
Attracting resources
The Director-General of BPE, Mr Alex Okoh said that the current economic environment required government to adopt innovative ways of attracting resources for infrastructure development.
Mr Okoh said an amendment of the BPE Act would among other things expand private sector participation in the Nigerian economy as well as attract more foreign capital to different sectors of the economy.
Mercy Chukwudiebere
