Vice President Yemi Osinbajo has admitted that in spite of the Government interventions over the years, Nigeria still faces a huge infrastructural deficit.
He said: “inspite of Government interventions over the years, Nigeria still faces a huge infrastructural deficit, which is constraining rapid economic growth.
“The Federal Government recognizes this fact which is why we are considering other approaches to complement and boost financing for the development and maintenance of infrastructure in Nigeria.
“It is clear that this deficit can only be made up by private investment. Private sector is 92% of GDP while the Public Sector is mere 8%. So, the synergy between the public and private sector through Public-Private Partnerships (PPP) is really the realistic solution.”
professor Osinbajo, who spoke today December 3 at a webinar organized by Bureau for Public Enterprises (BPE) on deepening the Nigerian infrastructure stock through Public-Private Partnership (PPP), said: “Nigeria needs up to $3 trillion over the next 30 years to bridge the infrastructure gap.
“The Federal Government would have to spend the entire revised 2020 appropriation of N10.81 trillion continuously for the next 108 years or more on capital expenditure (CAPEX) to meet that target. The fact that only N2.49 trillion was appropriated for capital expenditure in 2020, reflects the importance of deliberate and pragmatic action to boost infrastructural spending.
“It seems to me to be quite clear that the financial outlay and management capability required for infrastructural development and service delivery outstrip the financial and technical resources available to government.
“In other words, the traditional method of building infrastructure through budgetary allocations is inadequate and set to become harder because of increasingly limited fiscal space.”
On the benefits of effectively implementing PPP arrangement for Nigeria, the Vice President explained that if properly designed and executed, PPP models will unlock innovative infrastructure financing and management in a transparent and more efficient manner. Indeed, using PPP frameworks, Nigeria has the potential to attract and benefit immensely from huge local and foreign private sector resources.
On how the Buhari administration is leveraging the partnership with the private sector to bridge the huge infrastructure gap, Professor Osinbajo said: “the Federal Government has recently issued a circular on the administration of PPP projects in the country to provide the much-needed clarity. The circular re-emphasizes that the BPE shall be responsible for the concession of public enterprises and infrastructure already listed in the First and Second Schedules of the Public Enterprises Act.”