Speaking at the Public Private Partnership, PPP, stakeholders’ workshop organized by the African Development Bank, AfDB, in Abuja, yesterday, she said the Federal Government could not afford the entire funding requirement, therefore, making private sector investment in infrastructure inevitable.
According to her, “To fund infrastructure, Nigeria needs about $14 billion every year, out of which $10 billion should come from the federal level. And this estimate is not comprehensive because it is likely to be higher when the total financial outlay needed to fund the Infrastructure Master plan is calculated.
“Currently the country’s spending on infrastructure is about $6 billion, so there is a big gap that needs to be filled. We are talking about something in the region of $8 billion. That is why PPPs are very important to Nigeria at the moment”.
Dr. Okonjo-Iweala noted that some of the PPP arrangements of the past were bogged down by certain inadequacies in the frameworks of the deals, making them unable to progress as successfully as anticipated.
She, therefore, stated that there was need for a review of the PPPs in such a way that the government and the Nigerian public could derive the desired benefits under a legal framework that would be fair to all parties.
Past arrangements, she pointed out, were skewed in favour of private investors, leaving the Nigerian government to bear virtually all the risks, with private investors, sometimes, asking for as much as 30 per cent return on their investment.
PPPs represent a dynamic form of inter-sectoral cooperation that is being rapidly adopted and exploited by many jurisdictions worldwide.
Globally, PPPs have become a sustainable mechanism for financing infrastructural and other development projects.
Credit: Emma Ujah/Vanguard
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