Friday, February 21, 2020 / 12:21 PM /Bukola Akinyele for WebTV / Header Image By: WebTV

Nigeria has attracted about $8bn ininvestment inflows into the economy through public-private partnership (PPP)projects and initiatives.

The Director-General of the InfrastructureConcession Regulatory Commission (ICRC), Engr. Chidi Izuwah disclosed this asone of the guest speakers at the February 2020 breakfast meeting of theNigeria-British Chamber of Commerce (NBCC) in Lagos.

Speaking on the theme "Public-PrivatePartnerships: How To Make It Work In Nigeria," Engr. Izuwah said the countrycurrently has a robust and world-class PPP disclosure platform that istransparent, reliable and credible.

He said 69 post-contract PPP projects arecurrently under implementation in the country by the ICRC through the project'sdisclosure portal.

According to him, the ICRC projectdisclosure portal is the first-ever in the globe and was in partnership withthe World Bank.

Speaking further he said as, at the end of2019, there were 138 pre-contract projects at Development and Procurementphases at the ICRC website www.icrc.gov.ng

Engr. Izuwah listed the following asconditions for a successful PPP in Nigeria, which include;

• A stable policy and regulatory framework

• Sanctity of contracts

• Long term vision, strategy, and plan owned by the government

• Adequate PPP project development

• Equitable PPP contractual framework

• The transparent selection process for projects

• Reliable revenue sources in the country

• Managing the unexpected

Giving the introductory remarks Mr. Akin Osuntoki,  Chairman Programmes Committee for the NBCChighlighted the following as the cardinal objectives.

• Trade Facilitation between two countries

• Play a great part on advocacy and positively influencing policies

• Communicate government policy

• Create awareness with members and encourage networking

In his welcome address, the President and Chairman ofthe NBCC council, Mr. Kayode Falowo, acknowledged the fact that every sector inthe Nigerian economy has experienced huge gaps in infrastructure, coveringareas like transportation, energy, health, and education amongst others.

He believed the topic of discourse on the viability ofPPPs in Nigeria was apt as it can go a long way to address the infrastructuredeficit in the country and unlock economic activities in the nation.

Guest Speaker and Managing Director/CEO of StandardChartered Nigeria  Mr. Lamin Manjang, in his presentation, alluded to thepoint that Nigeria has the largest economy in Africa,  with enormouspotential for growth across many sectors.

Growth, according to Mr. Manjang, has been constrainedby several factors with infrastructure as constituting the major drag in thecountry. He stressed that it was the primary responsibility of the governmentto provide this infrastructure. 

"We all know that government is constrained by theavailability of resources and the share size of the gap that we need toaddress, which is where the concept of Public-Private Partnerships comes in," Mr. Manjang said.

He noted that PPP is the appropriation between thepublic and the private sector, where both parties jointly hand out a projectbased on an agreed division of risk, with each party regaining its identity.

The Standard Chartered Bank Nigeria CEO  citedexamples of PPP projects in Nigeria, such as the Lekki Toll project, LekkiSeaport Project, Azura IPP Project, and the Murtala Mohammed Terminal AirportProject.

Speaking further, he stressed that Nigeria needs Foreign Direct Investment (FDIs) to fill the gap, especially in the area ofinfrastructure and specifically the power sectors to accelerate growth.

With effective and viable PPPs, Nigeria, from theperspective of Mr. Manjang, could achieve scale in its GDP growth, from thecurrent  2.28%, which is at a slow pace and not good enough to addresssocio-economic issues.

Mr. Kunle Elebute, the Senior Partner of KPMG Nigeriaand Chairman KPMG Africa, gave a presentation on the context for Public-PrivatePartnership(PPP) and the merits for success in Nigeria.

According to him, the market needs huge investment ininfrastructure to address the many decades of deficits that have largelyimpacted the economy.

He called for a robust economic master plan for infrastructurein a country that will cover the next 30 years.

Speaking on the projects, Mr. Elebute made a casestudy of Lekki Epe Toll and highlighted the following learning points;

• High leverage D/E of 83/17 principally due to high traffic

• Delay in construction as a result of challenges in securing a sovereign guarantee

• Public opposition to tolling a previously "toll-free" road and subsequent Government buyback to prevent toll hikes

• International lenders provided the expertise which local lenders leveraged

• The problem with the PPPs already carried out in hisview has to do with concession.

He mentionedfive areas that drive the merit for success on the Public-Private Partnershipwhich include;

• Strong Legal framework

• Political, Legal Justice system

• Security

• Financial structure

• Project specification

Speaking further he outlined the following issues forconsideration by policymakers and key stakeholders to deepen PPPs in thecountry;

• PPPs require significant political to kick start and sustain the programme due to opposition from various stakeholders,

• Domestic financial markets must be ready to provide long term financing for successful financing as domestic banks must demonstrate an appetite to take on the credit risk of PPPs. Foreign banks will only provide support if domestic appetite is demonstrated.

• PPP advisory and structuring expertise is provided by global consulting and legal firms who can leverage their global expertise and also send a positive signal to international and local bidders about the transparency and fairness of the PPP bidding process

• Typically, PPP concession agreements should be reviewed within 3-5 years of commencement of operations to reflect the realities of the environment and other relevant variables not taken into account at the time of the bankable study and bidding.  

The NBCC February 2020breakfast session also featured a panel session moderated by Mr. OlufemiAwoyemi, FCA Founder/Chairman Proshare Nigeria Limited.

Download PPP Presentation- Mr Chidi Izuwah

Download PPP Presentation- Kunle Elebute

Watch Video

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