By Tony Obiechina, Abuja
The Infrastructure Concession Regulatory Commission is set to gazette a total of 53 eligible and bankable Public Private Partnership projects, worth about $22bn for investors.
Already, the Commission has published 51 eligible and bankable PPP projects, worth over $17bn from different economic sectors which have been granted the Outline Business Case Compliance Certificates, but which did not have identified bidders.
The Director-General of ICRC, Mr Michael Ohiani made these disclosures at the Africa Public Private Partnership Network Investment summit with the theme: “Financing Africa’s infrastructure through Public Private Partnership”, in Abuja on Monday.
He told participants at the event that as of May 2022, there are 77 post-contract PPP projects under implementation at the ICRC Projects Disclosure Portal.
The portal is the first disclosure portal in the world, established by the ICRC in collaboration with the World Bank.
The ICRC DG pointed out that the Commission has about 197 pre-contract projects at different phases of project development and procurement.
Similarly, he said the agency since it was created has achieved a lot, noting for instance that between 2010 following the inauguration of its Governing Board and 2021, under the regulatory guidance of the ICRC, the federal government has approved PPP projects worth more than $9bn.
The ICRC Boss also disclosed that the agency has issued 128 Outline Business Case Compliance Certificates to date, stating that these projects have been certified bankable projects, to enable them proceed to procurement phase.
He said, “This Investment Summit is coming at a time when the continent is gradually coming out of the COVID 19 pandemic, which dealt series of blows to investment portfolios and decisions; as well implementation of on-going infrastructure service delivery projects.
“The Pandemic also affected the ability of governments to finance the much-needed public projects, with its attendant record of dwindling revenue.
“Our country was not spared from these challenges; however, there is the growing need to salvage our projects which are under implementation on one hand while developing bankable and viable PPP projects for investment on the other hand.
“The innovative structuring of PPP transactions through globally accepted competitive and transparent processes cannot be over-emphasized; especially as the initiative is in support of our 2021 to 2025 Mid-Term National Development Plan, which projects the use of private sector financing to achieve about 85 per cent of our N348.1trn Plan.”
He said as countries look towards infrastructure financing, the key in the 21st century is for governments to enhance the investment environment for national level investment for local and foreign investors, and look to innovative financing mechanisms that promote local capital markets, private sector risk, and rely on regulatory systems to balance investor and consumer requirements.
With fiscal and budgetary funding constraints plaguing governments across the continent, the ICRC DG told participants that private participation in infrastructure has become an economic necessity, rather than an optional financing solution, as hitherto considered.
“Partnership between the public and private sectors for the financing, design, build, maintenance of infrastructure and delivery of associated services is absolutely necessary for Africa governments to meet the need for modern and efficient infrastructure, and for reliable cost-effective delivery of public services.
“Governments all over the world, including the Africa continent, have come to recognize that the collaboration between public and private sectors is crucial to securing dependable and sustainable funding for infrastructure and reducing the pressure on fiscal budgets.
“PPP arrangements have engendered acceleration of infrastructure provision, faster implementation of projects, and reduced whole life costs of projects,” he added.
He expressed optimism that the Summit on financing Africa’s infrastructure through PPP would provide the unique opportunity to have the details, the direction, the options, and focus on infrastructure financing to boost the African economy.
In his keynote address at the event, the Secretary to the Government of the Federation, Mr Boss Mustapha, stated that Africa faces huge infrastructure gaps.
However, he pointed out that these infrastructure gaps also present huge opportunities for private investment through public-private partnerships, especially in sectors such as energy, housing, transportation, agriculture, technology, waste management, and social services and amenities.
According to him, the continent requires energy, transportation, and new satellite cities to accommodate millions of people moving from rural to urban areas.
He said, “The current economic growth pattern on the continent stresses the importance of private sector investment through PPP in promoting Africa’s growth and structural transformation.
“Hence, identifying the private sector development as an engine of sustainable structural transformation through PPPs is of critical importance to the continent.
“Indeed, to release the potential of Africa, there is the need to develop and imbibe a resilient and vibrant PPP framework as a means of facilitating rapid infrastructure transformation of the continent.”
To be able to stimulate and create a vibrant private sector on the continent and accelerate infrastructure development, the SGF stated that a number of issues must be addressed.
“There is definitely the need to create a welcoming investment climate. This can be achieved by reducing risks and costs of doing business and by securing private property rights, improving governance, fighting corruption, simplifying regulations, and promoting competition.
“African governments must also resist pressure to erect trade barriers for intra-African trade to flourish. Currently, intra-African trade amongst African states is about 10 per cent of total exports. This is the lowest amongst other regions in the world.
“But we strongly believe that with the initiative of the African Continental Free Trade Agreement the situation will drastically improve,” he added.
Mustapha said there is also the need for financial sector development by strengthening regulatory and institutional frameworks to improve governance and increase competition, improving access to finance and financial literacy, developing payment systems, and enhancing creditor rights.
In his goodwill message, the Director-General of the Nigerian Governors Forum (NGF), Mr Asishana Okauru, said the Public-Private Partnerships (PPPs) have shown that if properly structured, could be an effective infrastructure financing and delivery tool.
“In Nigeria, proactively we have already begun this process as the Nigeria Governors’ Forum in collaboration with the ICRC has established the Nigeria Public-Private Partnership Network to address the issues and bottlenecks towards Infrastructural development of strategic sectors of the subnational economy by public-private partnerships”, he stated.
He noted that the NGF believes that improving the capacity and resources of State governments to prepare PPP pipelines and bankable PPP projects, offers a sustainable long-term approach to improving social infrastructure, enhancing the value of public sector assets, and making better use of taxpayers’ money.
