The Vice President and Chairman, National Council on Privatisation (NCP), Prof. Yemi Osinbajo has clarified that with the new Federal Government’s circular on the administration of Public-Private Partnership (PPP) projects in the country, the Bureau of Public Enterprises (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.
In addition, the Vice President said that the BPE shall act on behalf of the Federal Government of Nigeria (FGN) as the counterparty on all infrastructure projects being developed on a PPP basis whilst the ICRC continues to act as the regulatory agency for PPP transactions with powers to inspect, supervise and monitor the projects and processes to ensure compliance with relevant laws, policies and regulations.
Osinbajo, who made the clarification on Thursday via Zoom at the Webinar organised by the Bureau of Public Enterprises (BPE) on deepening the Nigerian Infrastructure stock through Public-Private Partnership (PPP), said it was expected that “this new policy direction would provide clarity to stakeholders and foster the improvement of PPP programmes in the country. Ministries, Departments and Agencies (MDAs) as well as the multilateral agencies and our development partners, are urged to support the PPP policy objectives and institutional arrangements already put up by Government.”
He, however, said that the Federal Government was willing to dialogue and incorporate suggestions from stakeholders with a view to further strengthening Nigeria’s PPP framework.
According to the NCP Chairman, as part of the new environment being created for the implementation of PPP projects, the Federal Government through the CBN, Nigerian Sovereign Investment Authority and African Finance Corporation and other financial institutions, will be creating a N15 trillion Infrastructure Fund that will help not only unlock investment from local sources but also attract foreign private investment in infrastructure development.
The Vice President explained: “We will bring in the best-qualified individuals to manage the Infraco because most investors will want to see a transparently run Infraco, and we intend to provide exactly that.
“This is to ensure that the investors’ resources are applied only to the best possible projects after the management of the company has looked at them and chosen them carefully, and because they are commercial projects, we have to make sure that the income streams from them will be more than sufficient to assure investors that their investments will be profitable”, Osinbajo stressed
The Vice President noted that the current deficit in Nigeria’s infrastructure represented both a challenge and an opportunity, pointing out that “for too long we have dwelt on the challenges but we must now redirect our focus to the opportunities, using PPPs as a springboard.”
The NCP Chairman said despite government’s interventions over the years, Nigeria still faced a huge infrastructure deficit, which is constraining rapid economic growth, adding that 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 N10.81 trillion 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”, he said.
In his speech, Director General of the Bureau of Public Enterprises (BPE), Mr. Alex Okoh, said government had taken a significant step towards making Nigeria an investment destination for infrastructure development by issuing the circular.
According to him, further to the latest circular, the BPE would provide the support to MDAs on PPP transactions and contract management by collaborating with MDAs and provide support in the screening and appraisal of all the identified projects to determine their suitability as PPP projects in line with the ICRC guidelines; and ensuring that all the necessary steps required to comply with regulatory requirements (at every phase of the PPP project life cycle) are followed.
In addition, he said the Bureau would promote PPP arrangements within government to ensure that projects that would attract market interest are not procured using traditional methods; offer experience and specialist skills acquired over the last 30 years in managing transactions involving local and international private sector investors; and among others; and act as a knowledge centre by collating and disseminating information and knowledge about PPPs to all stakeholders.
Okoh said with the clarity of the circular, it was now time for all the relevant stakeholders, the MDAs, the PPP unit of the Federal Ministry of Finance, Budget & National Planning, the ICRC, the development partners, transaction advisers, the NASS, the organized labour and other stakeholders in the infrastructure space to work together towards bridging the country’s yawning infrastructure gap.