The only way Nigeria can effectively address its massive infrastructural deficit is by a public-private partnership (PPP) arrangement, Vice President Yemi Osinbajo has said.
Osinbajo said at the opening of a two-day retreat of the National Council on Privatization (NCP) in Abuja on Thursday to deliberate, among other things, the proposed amendment of the Public Enterprises (Privatization & Commercialization) Act 1999.
Citing statistics from the Nigerian Integrated Infrastructure Masterplan (NIIMP) and the Economic Recovery and Growth Plan (ERGP) 2017-2020 to buttress his point, the VP said “Nigeria will require at least $2.3 trillion over the next 30 years to bridge the infrastructure funding 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. While the government can take either commercial or concessionary loans for infrastructure development, this is an additional burden on a usually considerably leveraged balance sheet.
“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,” Osinbajo said.
Urging participants in the retreat drawn from the private and public sectors to remain focused on the objectives of the meeting, the Vice President emphasized that developing a framework that would attract investors should be topmost in their deliberations.
The Director-General of the Bureau of Public Enterprises (BPE), Alex Okoh, said the current economic environment in the country required the government to adopt innovative ways of attracting resources to finance infrastructure development.
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.
In attendance at the opening session at the retreat included the Minister of Industry, Trade and Investment, Niyi Adebayo; Chairman of the Senate Committee on Privatization, Theodore Orji; representatives from the office of the Attorney General of the Federation, the Central Bank of Nigeria (CBN), and members of the National Council on Privatization, among others.