The competitiveness of any economy in the modern world has correlation with its infrastructural state. The coveted knowledge economy which all nations now struggle to embrace is premised on hard infrastructure that propels real growth and impact lives.
In this interview with the Director General,Engr. Chidi K.C. Izuwah talks about the giant strides Nigeria has made in infrastructure development and the role of the private sector in this regard.
In this interview with the Director General, Engr. Chidi K.C. Izuwah talks about the giant strides Nigeria has made in infrastructure development and the role of the private sector in this regard.
Q1: How would you assess the present state of infrastructure versus what Nigeria needs to be a major regional economic bloc?
Based on Nigeria’s 30-year National Integrated Infrastructure Master Plan (NIIMP), which covered some strategic sectors of the economy including energy, transport, agriculture, water resources, social infrastructure and security, Nigeria’s infrastructure targets and investment require an expenditure of US$3.10 trillion (in 2010 prices) over 30 years to close the infrastructure gap. The current pace may not achieve this unless a substantial investment is injected into infrastructure development. Even at that, it is still a very tall order as Nigeria is currently faced with huge infrastructural gap which has hindered her aspirations to exploit its rich natural and human resources to stimulate and fast track development.
The NIIMP document states that the International Benchmark for core infrastructure is about 70% of GDP. As at 2012, Nigeria’s spend on infrastructure was between 20% – 25% of GDP (USD 461 billion), which compared to emerging economies such as Brazil (47%), India (58%), China (76%), South Africa (87%), Indonesia (70%) is inadequate
Between 2009 and 2013, Nigeria invested a mere $664 per capita per annum in infrastructure or three per cent of GDP, compared with an average of $3,060 or five per cent of GDP in developed countries. As at 2017 the total amount of funds required to provide quality infrastructure in Nigeria till 2023 is about $100 billion, about $60 billion would be required for the oil and gas sector; about $20 billion to revamp the power sector; $14 billion for road; and between $8 billion and $17 billion for rail tracks. Other sectors that require huge investments include housing, ports, airports, dams, water and telecommunication.
Nigeria’s huge gap in infrastructure has over the years, diminished economic growth and competitiveness. Less than 56 per cent of Nigerians have access to electricity compared to 80 per cent for developed countries. This level of access translates to an average of 24 hours in a week. For over 75 per cent of businesses operating in Nigeria, power supply is a major constraint. Of the over 10,000 MW of Nigerian power sector generation capacity, between 2,500 to 3,500 MW is available for over 170 million. This compares unfavourably with South Africa that generates 50,000 megawatts for a population of about 50 million.” About 68 per cent of all roads in the country are in deplorable condition, with only about 18 per cent of Nigerian federal roads paved. Recent studies suggest that if the infrastructure endowment of Nigeria were raised to that of the Africa region’s middle income countries, it could boost annual GDP growth by about four percentage points.
For instance, whereas Nigeria’s power consumption per capita was 138 kWH (enough to power a light bulb), those of India, Brazil and South Africa were respectively 498 kWH, 2,384 kWH, 4803 kWH. In the same vein, whereas India, Brazil and South Africa have 19, 30, and 17 houses per 100 people respectively, Nigeria has only 7. The effect of expenditure pattern over the years is clear to see in the state of energy, transport, agriculture and water resources, social infrastructure and security sectors today.
Q2: Nigeria needs massive investments beyond the means available to government in order to close the yawning infrastructure gap. What is the role of Private Sector capital in the Nation’s infrastructure sector development at the moment?
The evidence is clear; there is more money in the private sector than in the public sector. That private sector capital is the engine of growth is not an exaggeration. Successful businesses drive growth, create jobs and pay the taxes that finance services and investment.
According to the World Economic Forum’s 2018 Global Competitiveness Index, Nigeria is ranked almost at the bottom of the table – 115 out of 140 countries on infrastructure development and the Forum’s 2018 Executive Opinion Survey also pointed to poor supply of infrastructure as the largest constraint on doing business in the country.
In recognition of the current state of the Nation’s financial resources, the country’s aspiration may never be attained without effective collaboration with the private sector. The private sector is recognized as the main driver of economic growth and development the world over giving their role in efficient management of scarce resources in attaining competitive edge.
In developing countries, private sector capital generates 90 per cent of jobs, funds 60 per cent of all investments and provides more than 80 per cent of government revenues. Private companies are providing an ever increasing share of essential services in developing countries, such as banking, telecommunications, health and education. (Sustainable and inclusive private sector capital-led growth that contributes to reducing poverty does not happen of its own accord). The private sector capital is critical to economic growth and poverty reduction, but it cannot and does not act alone.
Private sector capital in Nigeria plays a huge role in helping to fight the problem of extreme poverty by taking responsibility of tasks performed by the state, thereby relieving the pressure on public funding of expenditure and allowing the Federal Government to focus its resources on key social and physical infrastructure.
Private sector capital also helps in broadening the economic base, making Nigeria less susceptible to external stimuli. Private sector capital also helps in human resource development education and training job skill formation. The benefits of private sector capital are numerous because of the profit maximizing model of private enterprises and their well defined economic goal.
Q3: Which area of economic sector do you think Nigeria needs massive investment more to make great impact?
There are many areas that require massive investment in Nigeria. Infrastructure deficit cuts across all sectors, but it is most severe in the area of power, water and sanitation. Without additional intervention, Nigeria’s infrastructure development will not progress fast enough to advance economic growth
For Nigeria to have a realistic push to improve certain aspects of infrastructure in Nigeria over the next 20 years, the following sectors need massive investment to make great impact
One: Extending the Grid intervention represents a policy push to increase electricity access for Nigerians. This intervention will increase the share of the population with access to electricity from 58% today to over 95% by 2040.
Two: Boosting Road Access intervention represents an effort to increase both gravel and paved road access across the country. This intervention will increase total road length from just over 200 000 km today to just below 400 000 in 2040. It will also increase the portion of paved roads from 16% today to nearly 66% in 2040. This scenario represents a 20% increase in total roads and a 40% increase in the portion of paved roads compared to the Current Path.
Three: Increasing Sanitation Access intervention represents a concerted effort to extend improved sanitation facilities in Nigeria over the next 20 years. It increases the share of the population with access to improved sanitation facilities from 29% today to 67% by 2040. This represents a 50% increase over the Current Path in 2040
Four: Improving Water Access intervention represents a similar effort to increase access to clean water. This intervention increases the share of the population with access to clean water from 70% today to 86% in 2040. It represents a 20% increase over the Current Path in 2040.
Five: Broad Infrastructure Push scenario combines all of the above interventions to simulate a broad policy push to improved access to infrastructure in Nigeria.
In addition, we have included a Broad Infrastructure Push + Family Planning intervention to demonstrate the effects of a cross-sectoral policy push to improve infrastructure and slow population growth. This scenario includes an intervention on Nigeria’s fertility rate. The intervention lowers fertility from 5.4 births today to 3.3 in 2040, representing a 38% decrease compared to the Current Path in 2040
Q4: How will you assess the success of local content policy in Nigeria’s drive for economic growth via infrastructural development?
The Nigerian Government initiated various measures to ensure that local content is promoted in all aspects of the drive to improve Nigeria’s economic growth. Some of the guideline and laws that have been introduced include,
One: the Nigerian Oil and Gas Industry Content Development Act which established the Nigerian Content Development and Monitoring Board, was enacted in 2010 to create the framework for growth of Nigerian content in respect of all operations and transactions in Nigeria’s Oil and Gas Sector. Some of the achievements are;
In the area of indigenous Asset Ownership, the Nigerian Content Development and Monitoring Board (NCDMB) has been able to save the country about $2.5billion through its promotion of indigenous marine vessel and rig ownership.
In the area of In-Country Fabrication, between $2-$5 billion worth of investments have been made in the development of new fabrication yards and the upgrade of existing yards and facilities.
In the area of Manufacturing, notable among the achievements is the use of made-in-Nigeria pipes for the first time in the nation’s oil and gas industry by ExxonMobil. According to the NCDMB, construction work has commenced for two steel pipe mills in Bayelsa and Edo states. The NCDMB has stated that it has plans to establish world class industrial parks in strategic oil bearing communities through the Nigerian Oil and Gas Industrial Parks Scheme (NOGIPS).
In the area of Human Capital Development and Training, the On the Job Training (OJT) scheme of the NCDMB has been a success with over 5,000 employment/OJT slots created for Nigerian engineers and technicians on ongoing oil and gas projects.
In the area of funding, there is a Nigerian Content Development Fund. The Fund is pooled from 1% of all contracts awarded in the upstream sector of the oil and gas industry for use in developing the supply chain and building local capacity in the industry.
Also, considerable progress has been made in Finance and Insurance Nigerian Content. The body for private Upstream Oil and Gas Companies in Nigeria, the Oil Producers Trade Section (OPTS) members have deployed several initiatives to address the industry’s funding challenges by collaborating with Nigerian Banks. This has increased capacity of Nigerian Banks to service the financing needs of the industry’s contractors/vendors. It also led to an improvement in their understanding of the dynamics of the oil & gas sector and helped to develop their capabilities on project financing as well as the underwriting of project risks.
Two: The National Information Technology Development Agency (NITDA) in 2013 released guidelines on Nigerian content development in information and communication technology. According to the guidelines, ICT companies in Nigeria are to maintain 50% (fifty percent) local content either directly or by outsourcing to local businesses to encourage Nigerian representation and participation in the sector. On the basis of this 4 programme desks were created.
SERVICES: These are to ensure all Internet Service Providers (ISPs), Telcos, Networking and Data companies meet and fulfill all the provisions set out in the guidelines that established ONC; to ensure NITDA and National Communication Commission (NCC) fulfill their roles as set out in the guidelines; lead discussions with Multinational companies (MNCs) to ensure that local firms are given priority over offshore outsourcing in their procurement processes; facilitate the development and growth of an ICT enabled service industry in collaboration with the Nigerian Association of Information Technology and to enable Outsourcing Companies (NAITEOC) and other groups focused on the ICT services; Monitoring, enforcement and creative implementation of the guidelines; Promotion of the emergence and growth of local ICT-Enabled Services industry.
SOFTWARE: These are to ensure all Independent Software Vendors (ISVs) and Software Development Firms (SDFs) meet and fulfill all the provisions set out in the guidelines; to ensure NITDA fulfills its role as set out in the guidelines; to lead campaigns and awareness for the use and adoption of locally developed software;
to work with universities and institutions of higher learning to build centers of excellence for software engineering; to work with incubation centers, ISVs and SDFs to ensure that locally developed software meet the highest quality standards; to foster the growth of the software industry by facilitating funding, mergers, acquisitions and more visibility for Nigerian ICT entrepreneurs; to develop programmes and initiatives to increase demands for local software products and to determine areas requiring software intervention and provide funding for such initiatives.
HUMAN CAPITAL: Policies in this direction are to develop programmes and ideas that will lead to the development of software developers, ICT engineers, and entrepreneurs; identify target disciplines and technical competencies that need to be developed in the industry; institute training, development, internship and placement programmes; ensure MNCs adhere to the provisions set out in the guidelines; Lead discussions with MNCs to encourage technology transfer and human capital investments; ensure partnership with higher institutions and NCS and CPN to setup a skill acquisition/augmenting programme.
HARDWARE: Policies in this direction are to ensure Original Equipment Manufacturers (OEMs) and Original Design Manufacturers (ODMs) meet and fulfill all the provisions set out in the guidelines; develop programmes and initiatives to increase demands for local ICT products; and to organize and facilitate quality management forums, discussions and processes.
Similar local content policy and programmes exist in virtually all sectors of the Nigerian economy to drive development and enhance infrastructure delivery. To strengthen the local policy initiatives of the country, President Buhari on 5th February 2018, signed the Presidential Executive Order 5 for planning and execution of projects, as well as the promotion of Nigerian content in science, engineering and technology. Under the Executive Order, procuring authorities shall give preference to Nigerian companies and firms in the award of contracts in line with the Public Procurement Act, 2007. The Executive Order prohibits the Ministry of Interior from giving visas to foreign workers whose skills are readily available in Nigeria. The order also directs Ministries, Department and Agencies to engage indigenous professionals in the planning, design and execution of national security projects.
Terms of Reference (ToRs) for PPP Transaction Advisors in Nigeria made it mandatory for foreign firms to partner with local firms in bidding for Transaction Advisory Services.
Under the PUBLIC PROCUREMENT ACT, 2007; Domestic preferences Section 34, (1) A procuring entity may grant a margin of preference in the evaluation of tenders, when comparing tenders from domestic bidders with those from foreign bidders or when comparing tenders from domestic suppliers offering goods manufactured locally with those offering goods manufactured abroad.
(2) Where a procuring entity intends to allow domestic preferences, the bidding documents shall clearly indicate any preference to be granted to domestic suppliers and contractors and the information required to establish the eligibility of a bid for such preference.
(3) Margins of preference shall apply only to tenders under international competitive bidding.
(4) The Bureau shall by regulation from time to time set the limits and the formulae for the computation of margins of preference and determine the contents of goods manufactured locally
Q5: How has Nigeria’s huge infrastructure deficit gap affected economic growth and development and the quality of life of Nigerians?
Nigeria has historically under-invested in infrastructure. Hence, infrastructure has been a longstanding issue for the country. Electricity was cited as the second-greatest obstacle to business and transport (rail, roads, airports, and ports) as the fifth-greatest obstacle to business in the World Bank’s 2014 Enterprise Survey of more than 2500 local companies. The World Economic Forum’s 2019 Global Competitiveness Index ranked Nigeria 130th out of 141 countries in terms of infrastructure, with the poor supply of infrastructure often being cited as one of the largest constraints to doing business in the country. A report for the McKinsey Global Institute estimates that the core infrastructure stock of Nigeria (including roads, rail, ports, airports, power, water, and communication networks) is worth only 35-40% of GDP, compared with an average of 70% of GDP in other developing economies examined.
At present only 16% of Nigeria’s roads are paved, compared on average to half of the roads in the world’s lower middle-income countries. Similarly, in 2016, only about 30% of Nigeria’s population had access to improved sanitation facilities compared to, more than half of the population in the country’s global income peers. The situation for access to clean water and electricity is similar.
If this situation is not addressed and reversed, despite our population which is expected to increase to 330 million people, all Nigeria indices will continue to drop.
PPP is more about creating a structure in which greater value for money is achieved for services, through private sector innovation and management skills.
Q6: How has the ICRC managed the regulation of Public Private Partnership (PPP) endeavours of the Federal government in addressing Nigeria’s physical infrastructure deficit which hampers economic development? How will you describe this experience in Nigeria?
PPPs as defined by the National Council for Public Private Partnerships is a “contractual agreement between a public agency (federal, state or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility”. In effect, the key defining elements of a PPP is the focus on service delivery and a real partnership that involves the sharing of risks and rewards.
PPPs have been used for delivery of services worldwide in sectors like, power, education, roads, aviation and even in some specific segments of defense services like facility maintenance and simulators procurement/training.
There are three main reasons that motivate governments to enter into PPPs for infrastructure and service. These are to attract private expertise and or capital investment for infrastructure and service delivery improvements (often to either supplement scarce public resources or release them for other public needs); to increase efficiency and use available resources for infrastructure and service delivery more effectively; and to reform sectors through a reallocation of roles, incentives and improve accountability
The seven key principles for PPPs are:
Value for Money: Ensure project appraisals take into account not only cost but also risks and service quality.
Public interest: Adequate and prior consultation with end-users and other stakeholders of an infrastructure project as standard.
Output requirements: Concept of “verifiable service standards” to be used as basis for output or performance based specifications.
Transparency: Very high world class standards of public and corporate governance to enhance credibility and transparency.
Risk allocation: Risks allocated to the party best able to manage them.
Competition: Ensure business activities are subject to competition and appropriate commercial pressures, dismantling unnecessary barriers to entry, and implementing and enforcing adequate competition.
Capacity to deliver: Ensure authorities responsible for privately operated infrastructure have the capacity to manage the commercial processes involved and to partner on equal basis with their private sector counterparts.
A solicited PPP Procurement over any Federal Government Infrastructure would typically follow these steps.
First is the PPP Project Identification Phase. This involves PPP Project identification, prioritization by Ministries, Departments and Agencies (MDA) articulated in a concept note and submitted to the ICRC for assessment.
If ICRC’s assessment finds the project eligible for delivery through PPP, the Commission will advise the MDA to commence Project Development. The MDA will constitute a Project Steering Committee and Project Delivery Team for the Project and appoint a PPP Project Officer.
The ICRC will, based on the input from MDAs and in consultation with the Ministry of Budget and National Planning, develop annually an eligible pipeline of PPP projects for Approval by the Federal Executive Council (FEC).
Second, is the PPP Project Development and Preparation Phase. Where an MDA does has not have the internal capacity to prepare an Outline Business Case (OBC), a Transaction Adviser (TA) would be engaged by the MDA through a competitive bidding process as required under the Public Procurement Act of 2007, to produce the OBC.
The MDA would thereafter forward the OBC to the ICRC for review. Subject to assessment, ICRC would issue an OBC Compliance Certificate to the MDA or decline issuance and advise the MDA accordingly.
The Commission would consult the Federal Ministry of Finance (FMoF) in order to appropriately handle any contingent liability issues that may arise from her review of the OBC.
Third, is the PPP Procurement Phase. Following OBC’s certification by the ICRC, the MDA’s TA would commence a two staged RFQ/RFP procurement process leading to a competitive bidding process from which a preferred PPP Project Proponent (Investor) will emerge.
Negotiations would thereafter ensue, leading to the conclusion and submission of a Full Business Case (FBC) to ICRC for review. Following which, ICRC would issue an FBC Compliance Certificate to the MDA or decline issuance and advise the MDA accordingly.
The MDA would submit the FBC Compliance Certificate to FEC through the line Minister, for Approval.
Following FBC’s approval, the PPP Contract would be signed between the grantor MDA and the preferred PPP Project Proponent (Investor) after which ICRC will take custody of the PPP Contract as required under the Section 20 of the ICRC Act.
Fourth is the PPP Implementation Phase. Following Commercial Close the TA will follow through with the project and the preferred PPP Project Proponent
The Investor is to achieve Financial Close in line with the condition precedent in the PPP Contract.
The MDA is required under Section 12 of the Act to supervise the project diligently. On the other hand the ICRC and the MDA are required, under Section 10 of the Act, to conduct regular joint Inspections of the Project until the end of the contract.
On the challenges of PPP in Nigeria, I will say it has been a mixed bag of results but ICRC has encountered many challenges that are diverse in nature. Some of them are: the need for sub-national legal and institutional framework for PPPs; Capacity building to identify, select and implement PPPs; Funding of transaction costs; Support for financial strength; Availability of market for relatively smaller projects; Need for political commitment and communication strategy.
Adequate regulation that balances the needs of all stakeholders is critical.
ICRC whilst facing these challenges headlong have found the need to carry out the following activities:Regular and effective communication; Capacity building; and
Regular and constructive engagements.
For PPPs to work as well there is the need for Strong commitment from all parties; Open and transparent process and procedures; High spirit of genuine partnership, and a commitment to work for a win-win situation; and Full disclosure and sharing of information and concerns.
The ICRC is trying to create an Infrastructure Project Preparation Fund/Facility. The Fund will establish a sustainable way of preparing projects for private sector participation. ICRC has also ensured that the following structures are in place :-
Establishment of PPP Units; Continuous training and capacity building by ICRC and development partners; Continuous pre-contract support by ICRC; As well as Other PPP support initiatives such as the Nigeria Integrated Infrastructure Masterplan, the Nigeria Infrastructure Development Fund, Annuity PPPs, the
Nigerian Sovereign Investment Authority (NSIA) and Infra Credit Guarantee Fund,
New PPP Law, PPP Units in MDAs, Federal Roads and Bridges Tolling Policy,
Standardization Efforts (Business Case, Contracts etc), The Economic Recovery and Growth Plan (ERGP), and the Presidential Infrastructure Development Fund.
Others are Ease of Doing Business (Accelerated PPP Procurement Process), Request for Qualification (RFQ) / Request for Proposal (RFP), Single Cabinet Approval; and the Governance Documents – IDECK of India.
Q7: ICRC is a major plank in operationalizing the process of private sector participation in infrastructure financing in our country, how far has this helped Nigeria since the Commission was inaugurated in 2008.
In 2009, the ICRC, with the Federal Executive Council’s approval, issued the National Policy on Public Private Partnership (N4P). The N4P outlines the Federal Government’s objectives and commitment to the creation of an enabling environment for PPPs to thrive in Nigeria.
Our ongoing collaboration with the Office of the Head of Civil Service of the Federation led to the establishment of PPP Units in Ministries, Departments & Agencies (MDAs) to facilitate infrastructure service delivery through viable and bankable PPP projects. The PPP Units were inaugurated in 2013 and most are well developed and manned by professionals trained overtime through the Commission’s capacity building efforts.
Our efforts to broaden PPP knowledge amongst infrastructure MDAs led to the inauguration of the PPP Unit Consultative Forum (3PUCF) in 2013. The forum holds quarterly knowledge experience-sharing sessions for Heads of PPP Units in the Federal MDAs.
We launched the PPP Contracts Information Disclosure Web Portal in 2017 in Abuja – the first of its kind in the world. The main objective of the portal is to entrench accountability, integrity and transparency in PPP transactions in Nigeria.
The Commission championed the formation of the Nigerian Public Private Partnership Network (NPPPN) in 2011 as part of its mandate to institute a harmonized framework for PPPs in the country. The Network whose membership comprises States PPP agencies was re-launched in 2018 in collaboration with the Nigerian Governor’s Forum to give it added impetus.
ICRC has continued to align its processes to achieve government’s bid to create a suitable environment for investments in infrastructure and boost President Muhammadu Buhari administration’s Ease of Doing Business in Nigeria policy. It therefore got approval from the Federal Government to discontinue fee payment for Outline Business Case and Full Business Case Certificate of Compliance, to accelerate delivery of PPP projects.
The Commission was given Africa Infrastructure Regulator of the Year award in 2018 at the African Infrastructure (Ai) Investment Awards ceremony in Mauritius. A similar award was given in 2010.
In 2017 and 2018, ICRC came first in the Freedom of Information compliance ranking for its proactive disclosure of public finance expenditure information on its website. About 187 Nigerian public service institutions were assessed by the Public & Private Development Centre (PPDC). It equally won the PPPDC Award for its PPP Disclosure Web Portal in 2018.
ICRC collaborated with the Global Infrastructure Hub to host the first PPP Risk Allocation and Contract Management Tool workshop in Abuja which attracted regional participants.
As at December 2019, there are 69 post-contract PPP projects under implementation at the ICRC Projects Disclosure Portal
As at December 2019, there are 138 pre-contract projects at Development and Procurement phases at the ICRC website
Between 2010 and 2018, under the regulatory guidance of the ICRC, the Nigerian Government has approved PPP projects worth almost USD8 Billion.
The ICRC has helped Nigeria through private sector participation in several areas including: filling critical resource and expertise gap in infrastructure procurement, delivery and operation; accelerating procurement of infrastructure and services;
promoting faster implementation of projects, and reduced lifecycle costs due to private sector efficiencies; providing better risk allocation between public and private sectors, thus offering a better and sustainable incentive to perform;
accountability in resource utilization and also improve the overall quality of service; and the generation of additional revenue and overall value for money for the entire economy.
Q 8: How has the ICRC collaborated with State Government to promote an orderly and harmonized framework for development of infrastructure, and accelerated market development for PPP projects?
ICRC in collaboration with the
Nigerian Governors Forum (NGF) successfully re-launched the NPPPN in Abuja on
27th September 2018. The NPPPN was established as a collaborative platform for
knowledge and experience sharing amongst PPP agencies at the Federal and
Sub-national level. The network also
provides capacity building for PPP project development, procurement and
implementation as well as championing
the standardization of
sub- national PPP guidelines and practices.
The Forum has supported 21 States to enact PPP Laws to cover their jurisdiction, The states are:-
STATES WITH PPP LAWS
|S/N||STATE||PPP LAW STATUS|
|10||Enugu||Bill, 2nd reading|
The ICRC and Nigeria Governors Forum (NGF) have also signed an MOU to drive PPP at the sub-national level of Nigeria. Key objectives of the MoU are the
Convening of the Nigerian Public Private Partnership Network (NPPPN) on regular Basis; Infrastructure and PPP Knowledge Sharing and Capacity Development at the sub national level; Infrastructure & PPP policy analysis and strategy development including issuance of case studies and policy papers; Engaging with government at the national and sub national level, private sector, and civil societies on infrastructure, PPP issues and economic policies in Nigeria; and Actively driving real time and real life impactful economic and social infrastructure delivery in Nigeria via PPPs.
The ICRC has held capacity building workshops to encourage states to use PPP models to harness private sector expertise and project finance geared towards developing state infrastructure. Notably the recently concluded Joint PPP Units Consultative Forum (3PCUF) and Nigeria Public Private Partnership Network (NPPPN) which focused on sensitizing Federal and State PPP Unit Heads on accessing Afreximbank Project Preparation Financing facility geared towards the technical support of MDAs and States in developing their PPP pipeline projects.
Q 9: Promoting, facilitating, supporting, and coordinating implementation of a sound PPP Process and ensuring principle of good governance is very critical in attracting private sector into infrastructure. How has Nigeria fared in this?
The Executive arm of Nigeria’s government which is largely responsible for the development of the physical environment and provision of much needed socioeconomic infrastructure; has severally promoted the application of Public Private Partnership to enhance infrastructure delivery in the country.
As a result of this the ICRC Act, the legal framework for the participation of private sector in Federal Government infrastructure development through PPP contractual arrangements was enacted and ICRC was established . The ICRC provides an effective regulatory and institutional framework with which agencies of the Federal government can enter into partnership with the private sector for the provision of public services to ensure sustainable socio-economic development.
Q10: What should be the nation’s development plan for infrastructure for the next 10 years?
Nigeria already has an infrastructure development plan: the National Integrated Infrastructure Master plan (NIIMP) in place. It has prioritized critical sectors of the economy and the projects as well as provisos for PPPs. It is imperative that the plan is acted upon to ensure that the infrastructure deficit bedeviling the nation is arrested. The main obstacle to the plan is the issue of funding of the NIIMP; it proposes a $3.0 trillion investment over the 30 year proposed period of which the private sector is expected to provide 48% ($15-25 billion in the first 5 years alone). To achieve this, we are working on strengthening the legal framework to limit legal challenges on PPPs and also to limit uncertainties. We believe that in the next 10 years we would see massive infrastructure development in the critical sectors of health, education, power, transportation etc either through PPPs or through the traditional procurement process. A value for money analysis should be undertaken to justify the PPP model vs. public procurement (again to limit future challenges). A transparent tendering process is critical for involvement of credible local and foreign lenders/Investors.