By Babajide Okeowo
Vice President Yemi Osinbajo has stated that Nigeria needs to adopt new models of investments for infrastructural developments because relying on public expenditure alone is not sustainable.
This is even as he disclosed that the country requires $3trillion in the next 30 years to reduce its infrastructural deficit.
He disclosed this while featuring at a webinar organized by the Bureau of Public Enterprises (BPE).
“The Federal Government is 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. The private sector is 92 percent of GDP, while the public sector is a mere 8 percent. So, the synergy between the public and private sector through Public-Private Partnerships (PPP) is the realistic solution.
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 the 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,” he said.
He revealed that the FG has launched a series of PPP’s to enable Nigeria to meet its infrastructure deficit needs, citing the roles of agencies like the BPE with PPPs.
“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.
The circular equally stipulates that the BPE shall act on behalf of the Federal Government, as the counterparty on all infrastructure projects being developed on a PPP basis,” he added.
He disclosed that the Infrastructure Concession Regulatory Commission (ICRC) would continue to act as the regulatory agency for PPP transactions, with directives including inspections and monitoring of PPP projects.
