“The only way to effectively address the massive infrastructure deficit that the country faces is by Public-Private Partnership (PPP) arrangement in one form or the other,” Vice President Yemi Osinbajo has said.
Osinbajo stated this at the opening of a two-day retreat of the National Council on Privatization (NCP) which held on Thursday, March 18, 2021.
The retreat will among other things deliberate on 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 vice president noted 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.”
He said while 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 added.
While urging participants drawn from the private and public sectors at the retreat to remain focused on the objectives of the meeting, the vice president emphasized that developing a framework that will be attractive to investors should be topmost in their deliberations.