Nigeria needs $2.3 trn to bridge infrastructure gap – Osinbajo

Vice President Yemi Osinbajo says Nigeria will require at least $2.3 trillion over the next 30 years to bridge the infrastructure gap.

Prof Osinbajo said this Thursday at the opening of a two-day retreat of the National Council on Privatization (NCP) that would deliberate the proposed amendment of the Public Enterprises (Privatization & Commercialization) Act 1999.

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The Vice President, however, said that the only way to “effectively” address the massive infrastructural deficit that the country faced “is by Public-Private Partnership (PPP) arrangement in one form or the other”.

Osinbajo, who cited statistics from Nigerian Integrated Infrastructure Masterplan (NIIMP) and the Economic Recovery and Growth Plan (ERGP) 2017-2020 to buttress his point, said: “the review of budgetary allocation for capital expenditure even over the past decade will show that government resources are completely insufficient for this purpose.

“While the government can take either commercial or concessionary loans for infrastructure development, this is an additional burden on a usually considerably leveraged balance sheet.

“There is a large pool of investable funds from both local and international investors for the development and maintenance of infrastructure. But these are only accessible where there is a business case to be made for developing public infrastructure.

“So, for both institutional and individual investors, there is far more comfort with lending or with equity participation where a private sector entity partners with a public authority owner of the infrastructure.

“This way, the public partner can play its natural role of a regulator (regulation and policy), leaving the business to the private sector.

“So, for investors, PPP presents the best of both worlds,” Prof Osinbajo added in a statement issued by his media aide, Laolu Akande.

The Vice President stressed the need to develop a framework that will be attractive to investors.

Earlier in his opening remarks, the Director-General of BPE, Mr Alex Okoh, said the current economic environment requires the government to adopt innovative ways of attracting resources for infrastructure development.

He said an amendment of the BPE Act will among other things expand private sector participation in the Nigerian economy as well as attract more foreign capital to different sectors of the economy.