Ngozi Okonjo-Iweala, the minister of finance and coordinating minister for the economy, said on Monday that the country would require at least $14 billion annually to meet up with infrastructural investment, advocating appropriate legal framework for public-private partnerships (PPP) that would accommodate risk sharing.
Okonjo-Iweala, who made the disclosure while declaring open a 3-day PPP foundational training organised for stakeholders in Abuja by the African Development Bank (AfDB), said that some of the existing PPP framework and agreements in the country put all the risks involved in transactions on governments alone.
She charged participants to look into PPP key challenging areas like procurement, contractual, regulatory, legal issues and risks involved in the arrangements.
She said that the country needed about $14 billion annually to fund infrastructure development out of which $10 billion would come from the Federal Government.
READ ALSO: Why Should Nigeria Explore Inland Gas Basins for Power Generation? II
She said that the country’s spending on infrastructure was about six billion dollars, adding that there was a big gap which could only be filled through PPP.
Continuing, she said, “What it means is that there is a big gap especially as it is without the costing of a new infrastructure master plan which we are still waiting for. What I am just giving is just figures that are not even that complete because they do not encompass all of the cross-cutting type of infrastructure in the master plan.
“But even if it is a conservative figure, we already have gap and like many countries in the world, since budgetary resources and private sector investment alone will not be able to fill this gap, we have to look for other models of financing and that is where the PPP model comes in.
“We have really struggled to establish this model by trying to concession certain things like our ports; we also have some other public private sector projects we are looking at. More importantly, we have this feeling that we never get this model right the way it should work. We also lack the technical capacity to support the PPP projects going on, which was why government established the ICRC”, she added.
“We’ve got the second Niger Bridge which I think is going along very well. We’ve got the Lagos –Ibadan road, the Lekki Deep Seaport, the Onne Port and many more.
“There should be the right framework in terms of financial and economic analysis that permits participating parties to make a decent rate of returns to ensure that the consumers get a fair deal.
“I do not want a situation whereby after we finish the project we will be trying to come back and undo it because it was not properly structured,” she said.
Okonjo-Iweala said that one of the major problems confronting the success of PPP arrangement in Africa is its length of time.
She said that statistics had shown that it took an average of seven years to complete a PPP project on the continent.
The minister said that no ministry would hurry into any PPP agreement when the time horizon for delivery was longer, while the time horizon for the policy maker was short.
“If they are going to be in office for four years and the PPP is not going to be realised, it means that they are leaving office without delivering.
“We cannot afford to take that length of time because we have so many projects and this means that we need the financial capacity to understand the types of arrangements needed.”
