FG Moves To Bridge Infrastructural Gap, Adopts PPP For Projects

The Federal Government has said only projects that have passed Public Private Partnership (PPP) sustainability and are in compliance with National Integrated Infrastructure master plan will be included in the national budgets and procurement.

Minister of Finance, Budget and National Planning, Dr. Zainab Shamsuna Ahmed said this at a webinar organized by the Bureau on financing Public Private Partnerships (PPP) to boost infrastructure delivery in Nigeria.

The Minister who is also the Vice-Chairman of the National Council on Privatisation (NCP) said “all these efforts are to ensure that PPP takes a center stage in the procurement of infrastructure in the Nigeria. The government is ready and willing to dialogue and incorporate valuable suggestions from stakeholders with a view to further strengthening Nigeria’s PPP framework”.

While soliciting the support and cooperation of the public and private sectors partners, local and foreign partners, financial institutions and other important key stakeholders towards the successful implementation of the government’s new PPP policy directive, she said the present administration was committed to the development of the country’s infrastructure through PPP arrangements.

In his remarks, the Director General of the Bureau of Public Enterprises (BPE), Mr. Alex A. Okoh said in line with its new role in the Administration of Concession Programme of the Federal Government of Nigeria, the Bureau in collaboration with the Federal Ministry of Finance, Budget & National Planning, has developed a Public Private Partnership(PPP) Project Information tool which has been forwarded to all the Ministries, Departments and Agencies (MDAs) to capture all current and proposed infrastructure projects in the country.

According to Okoh, “this will help document a pipeline of PPP projects across various sectors of the economy”.

He said the Bureau would partner with the United Kingdom Nigeria Infrastructure Advisory Facility (UKNIAF) to screen projects to ensure that only projects that are financially as well as economically viable are included in the ‘National Pipeline of PPP Projects’ even as he stated that BPE also intends to establish a revolving Project Development Fund (PDF) for PPP transactions.

While stating that funds realised from the pool would be used to facilitate the proper structuring PPP transactions, he expressed the hope that financial institutions would support the initiative to increase the number of viable projects that could be successfully brought to commercial and financial close in the infrastructure space through PPPs.

The Director General stated that considering the huge gap in infrastructure stock in the country and the quantum of funding required to bridge this gap, the role of private sector financing through PPPs has assumed a very significant importance, hence the need to host the webinar.

According to him, going by the Nigerian Integrated Infrastructure Masterplan and the Economic Recovery & Growth Plan report, Nigeria needs up to $3 trillion over the next 30 years to close the infrastructure deficit.

“To put this in perspective, $3 trillion over 30 years translates to the sum of $100 billion every year. When we consider that the total expenditure under the 2021 national budget is N13.59 trillion (which is just over US$34 billion), it is clear that the traditional method of financing infrastructure development through budgetary allocations is grossly inadequate.

“Consequently, and given the present fiscal constraints, there is a pressing need to explore other funding options, hence the drive to attract private sector capital and financing through PPP arrangements.

He said to unlock the requisite financing from the private sector (who would typically raise investment capital through equity, as well as long-term debt from financial institutions), it is important that Nigeria’s PPP policy framework is unambiguous and in tandem with international best practises and adhere to the rules that guide issues around bankability.

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