The Federal Government has disclosed that from the 2021/2022 budgetary cycle, infrastructure projects would be examined for a possible Public-Private Partnership (PPP) viability.
This was disclosed by the Finance Minister, Zainab Ahmed on Thursday, in Abuja, at a Bureau of Public Enterprises (BPE) webinar titled: “Financing PPP to boost infrastructure delivery in Nigeria.”
What the Minister said
“All these efforts are to ensure that PPP takes a centre 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 strengthen Nigeria’s PPP framework,” she said.
She added that the approved projects would comply with National Integrated Infrastructure Master Plan (NIIMP), and must have the BPE and Finance Ministry’s approval.
The minister, who also doubles as the Vice-Chairman, National Council on Privatisation, said the present administration was committed to the development of the country’s infrastructure through PPP arrangements.
BPE boss, Alex Okoh, said the role of private funding of infrastructure is relevant more than ever as Nigeria needs $3 trillion in 30 years to close the infrastructure gap, citing that the BPE in collaboration with the Ministry of Finance, Budget and National Planning had developed a PPP project information tool.
“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 very significant importance, hence the need to host the webinar,” he said.
“Going by the (NIIMP) and the Economic Recovery and Growth Plan report, Nigeria needs up to three trillion dollars over the next 30 years to close the infrastructure deficit.
To put this in perspective, three trillion dollars over 30 years translates to the sum of 100 billion dollars every year,” he added.
“When we consider that the total expenditure under the 2021 national budget is N13.59 trillion, which is just over 34 billion dollars, it is clear that the traditional method of financing infrastructure development through budgetary allocations is grossly inadequate,” Okoh added.
What you should know
- Nairametrics reported that rating agency, Moody’s, stated that Nigeria needs to spend about $3 trillion over the space of 30 years to bridge the country’s infrastructure gap.
- Moody’s also added that significant financing from the private sector and multilateral organisations is needed to address Nigeria’s infrastructure deficit as Nigeria is behind other emerging market peers and will require significant investments to bridge its infrastructure gap.