PPP best way to address infrastructure deficit, says Osinbajo

’$2.3 trillion needed to bridge gap’
The only way to effectively address the massive infrastructure deficit facing the country is by Public-Private Partnership (PPP) arrangement in one form or the other, Vice President Yemi Osinbajo has said.

He made the comment, yesterday, at the opening of a two-day retreat of the National Council on Privatization (NCP).

The retreat is expected to deliberate, among others, on the proposed amendment of the Public Enterprises (Privatization & Commercialization) Act 1999.

Citing statistics from Nigerian Integrated Infrastructure Master Plan (NIIMP) and Economic Recovery and Growth Plan (ERGP) 2017-2020 to buttress his point, the vice president said Nigeria would require at least $2.3 trillion over the next 30 years to bridge the 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,” Osinbajo 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 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,” the vice president added.

While urging the participants, drawn from private and public sectors, at the retreat to remain focused on the objectives of the meeting, Osinbajo emphasised that developing a framework that would be attractive to investors should be topmost in the 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.

According to him, amendment of the BPE Act will, among other benefits, expand private sector participation in the nation’s economy as well as attract more foreign capital to different sectors.

Other dignitaries at the opening session include Minister of Industry, Trade and Investment, Otunba Niyi Adebayo; Chairman, Senate Committee on Privatisation, Theodore Orji; representatives of Attorney General of the Federation and Central Bank of Nigeria (CBN) and members of National Council on Privatization.