The $3tn Infrastructure Deficit: LCCI, NESG Advise FG to Adopt PPP Approach.



The Nigerian Economic Summit Group (NESG) and the Lagos Chamber of Commerce and Industry (LCCI) has called on the Muhammadu Buhari led Federal Government to adopt public/private partnership (PPP) Strategies to resolve Nigerian’s $3trillion infrastructural deficit.

Giving an opening address at the colloquium organized by the Centre for Ethics and Sustainable Development (CESD) with theme “Reshaping the Infrastructure Delivery Landscape for Sustainable Development in Nigeria “THE CEO NESG, Laoye Jaiyeola said the PPP strategy is the way to go.

According to him it would be difficult or near impossible for government to access the funds needed to erase the deficit saying that it needs to collaborate with the private sector to improve infrastructure delivery.

On his part, LCCI Director-General Musa Yusuf who was represented by Dr. Victor Nwani, its Director Research & Advocacy said FG’s move in the direction of debt will not erase our capital project short falls.

As he posited there is need to rethink the whole infrastructure development approach in Nigeria to arrive at sustainable delivery of such projects.Therefore, he urged government to clean up the nation and ensure ease of doing business and engender peace in the overall interest of the economy.

Dr. Olajumoke Akiode in her welcome address stated that Nigeria’s colonial government left capital project landmarks and so did the 1st Republic leaders. Hence she wondered why the nation is today bothered by huge infrastructural deficit.

Airing her position that there is need for rethinking in order to fast track our capital project development, she stated: “I think we have to co-create and catch up with the best in the world”

As she noted the colloquium was to find out what are hindering our infrastructural development and why we have the deficit.

For Prof. Neil Panelsen of University of Queens land Business School, Brisbane , Australia the issues of infrastructure are great matters across Africa and the world.

He said there are no easy answers to sustainable infrastructure as the issues surrounding it is becoming more complex as population expand,saying that both the traditional and ppp models are good options

In his contribution, Associate Director, KPMG Nigeria, Vince Onyejeli maintained that the two models are good and should be applied where necessary.However, he pointed out that where the government lack funds for infrastructural development that the PPP model should be employed to ensure project implementation.

He revealed that in the case of Nigeria it was not until the year 2000 and upwards that government begin to adopt to PPP Approach before then it had always used the  traditional procurement approach.

According to  him as regards to cost efficiency, innovation and standards the traditional approach is inferior to PPP, but that in terms of cheaper funds, project risk and simplicity of projects that the PPP model appears more effective.

He , nonetheless, noted that the major projects like the MMA2 and the Lagos-Ibadan Expressway that was consationed  out by government years ago  are having issues in  court, saying that such political  risk hinder PPP projects in Africa.

The Managing Director of Planet Project, Biodun Otunola harped on this fact and said it limits the success of PPP projects  in Nigeria as most banks are afraid to loan money beyond the four year tenure of policians  (in order not to be on the wrong side of political risk as a new president or governor may refuse to abide by the contractual agreement entered by his predecessor).

He  recalled that the government of Olusegun Obasanjo had sold off two oil refineries but the cheques of the buyers were returned back to them within six months after the sale agreement was sealed. This has shown that PPP’s have  government risk, currency risk, political risk, environmental risk etc.

Therefore he agued that western models and processes should not be swallowed  line ,hook and sinker;If Nigeria is to develop practical models that can help her transform. Said he: “we must be able to look at our processes to make it more practical.