Minister of Finance, Budget and National Planning, Dr. Zainab Shamsuna Ahmed has announced that from the 2021/2022 budget cycle, all infrastructure projects in Nigeria must be screened by the Federal Ministry of Finance Budget and National Planning and the Bureau for Public Enterprises (BPE) for Public Private Partnership (PPP) suitability and compliance with the National Integrated Infrastructure Master plan before inclusion in national budgets and subsequent procurement.
Speaking at a webinar organised by the Bureau of Public Enterprises (BPE) on financing Public Private Partnerships (PPP) to boost infrastructure delivery in Nigeria on Thursday, May 27, 2021, 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 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”.
She noted that the webinar was an opportunity to hear directly on the concerns and areas the participants would like the government to address to make investment beneficial and deliver value for money to the country at large.
While soliciting the support and cooperation of the public and private sector 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 BPE’s new role in the Administration of Concession Programme of the Federal Government of Nigeria, the agency 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.
He said “this will help to document a pipeline of PPP projects across various sectors of the economy” and that a number of the MDAs have already submitted their PPP Projects Information Data and that the final date for submission is May 31, 2021.
Okoh added that the Bureau would partner with the United Kingdom Nigeria Infrastructure Advisory Facility (UKNIAF) to screen projects to ensure that only projects that are financially and 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 of 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 isN13.59 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 added.
The Director General 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 practices and adhere to the rules that guide issues around bankability.
Okoh said the Bureau recognises the critical role that financial institutions will play, both in terms of ensuring that long-term credit facilities are extended to credible private sector investors for infrastructure development; and in relation to project identification, implementation, governance, performance, monitoring and regulatory oversight.
The one-day webinar which had Speakers as the Deputy Governor of the Central Bank of Nigeria (CBN) in charge of Economic Policy, Dr. Kingsley Obiora,the Partner, Amaya Capital Ltd, Dr. David Ladipo and the Managing Director, Infrastructure Credit Guarantee Company, Mr. Chinua Azubuike,drew participants from the public and private sector.
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May 28, 2021.