Why The Federal Government Is Pursuing Innovative Investment In Infrastructure

SPEECH BY HIS EXCELLENCY, PROF. YEMI OSINBAJO, SAN, GCON, VICE PRESIDENT OF THE FEDERAL REPUBLIC OF NIGERIA AND CHAIRMAN OF THE NATIONAL COUNCIL ON PRIVATISATION AT THE WEBINAR ON DEEPENING THE NIGERIAN INFRASTRUCTURE STOCK THROUGH PUBLIC-PRIVATE PARTNERSHIP (PPP) ON THE 3RD OF DECEMBER, 2020 PROTOCOLS I am very pleased to welcome you all to this webinar on deepening Nigeria’s Infrastructure Stock through Public-Private Partnerships (PPPs). In spite of Government interventions over the years, Nigeria still faces a huge infrastructural deficit, which is constraining rapid economic growth. According to the Nigerian Integrated Infrastructure Masterplan (NIIMP) and the Economic Recovery & Growth Plan, Nigeria needs up to $3 trillion over the next 30 years to bridge the infrastructure gap. To put this into perspective, the Federal Government would have to spend the entire revised 2020 appropriation of 10.81 trillion Naira 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 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. The Federal Government recognizes this fact, which is why we are considering other options 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 for by private investment. The private sector is 92% of GDP, while the Public Sector is a mere 8%. So, the synergy between the public and private sector through Public-Private Partnerships (PPP) is really the realistic solution. 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. We have, however, not fully leveraged the opportunities afforded to us by public-private partnerships, perhaps due to a lack of clarity on institutional responsibilities and decision criteria.  There has indeed been some ambiguity, particularly as it pertains to the roles of the Infrastructure Concession Regulatory Commission (ICRC); the Bureau of Public Enterprises (BPE), and other stakeholders involved in the PPP practice in the country. 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 official YouTube Channel for Oluyemi Oluleke Osinbajo, Nigerian Lawyer and Politician who served as the Vice President of Nigeria from the 29th of May 2015 to the 29th of May 2023. Before this, he served as the Attorney-General and Commissioner for Justice in Lagos State from 1999 to 2007. With a background in law and governance, he currently chairs the Climate Action Platform for Africa and serves as a Global Advisor for the Global Energy Alliance for People and Planet. He's also the Guardian of the Timbuktoo Africa Innovation Foundation and Chair of Future Perspectives. Follow Prof. Osinbajo online: Website: www.yemiosinbajo.ng Facebook: Professor Yemi Osinbajo Twitter/X: @ProfOsinbajo Instagram: @ProfOsinbajo LinkedIn: @Prof. Yemi Osinbajo