Vice President Yemi Osinbajo has said annual budgetary allocations alone cannot address the nation’s infrastructure deficit. He said government could only raise the required $2.3 trillion meant to bridge the gap in the next 30 years by effective collaboration with the private sector. Osinbajo stated this yesterday at the opening of a two–day retreat of the National Council on Privatisation (NCP), which will, among other things, deliberate on the proposed amendment of the Public Enterprises (Privatisation & Commercialisation) Act 1999.
In a release by his spokesman, Osinbajo said: “The only way to effectively address the massive infrastructural deficit that the country faces is by Public- Private Partnership (PPP) arrangement in one form or the other.” 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 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’s resources are completely insufficient for this purpose.” According to him, 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 in 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 emphasised that developing a framework that will be attractive to investors should be topmost in their deliberations.
Earlier in his opening remarks, the Director-General of BPE, Mr Alex Okoh, said the current economic environment required government to adopt innovative ways of attracting resources for infrastructure development. He 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.
Dignitaries at the opening session include the Minister of Industry, Trade and Investment, Otunba Niyi Adebayo; the Chairman, Senate Committee on Privatisation, Sen. 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 Privatisation, among others.