Vice President Yemi Osinbajo has said that Nigeria will require at least $2.3 trillion over the next 30 years to bridge the gap in the infrastructural deficit.
According to him, the only way to effectively address the massive infrastructural deficit that the country is facing is therefore, by Public-Private Partnership (PPP) arrangement in one form or the other.
Professor Osinbajo, who spoke today, March 18, at the opening of a 2-day retreat for the National Council on Privatization (NCP) in Abuja, to deliberate on the proposed amendment of the Public Enterprises (Privatization & Commercialization) Act 1999, said: “Nigeria will require at least $2.3 trillion over the next 30 years to bridge this gap.”
The vice President, who referred to statistics from Nigerian Integrated Infrastructure Masterplan (NIIMP) and the Economic Recovery and Growth Plan (ERGP) 2017-2020, said that the review of budgetary allocation for capital expenditure even over the past decade will show that government resources are completely insufficient for this purpose.
According to him, government can take either commercial or concessionary loans for infrastructure development, which he said, 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.”
Prof. Osinbajo advised the participants drawn from the private and public sectors at the retreat to remain focused on the objectives of the meeting, adding 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, Alex Okoh said that the current economic environment requires government to adopt innovative ways of attracting resources for infrastructure development.
He said that an amendment of the BPE Act will among other things, expand private sector participation in the Nigerian economy as well as attract more foreign capital to different sectors of the economy.