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FG looking beyond budgetary allocations to finance infrastructure-Finance Minister

Minister for Finance, criteria

PHILIP CLEMENT, ABUJA

The minister for Finance, Budget and National Planning, Mrs Zainab Ahmed, says the federal government is looking beyond budgetary allocations to finance critical infrastructure development in the country.

Mrs Ahmed who also doubles as Vice-Chair of the National Council on Privatisation (NCP) said this at the recently held webinar on financing public-private partnership (PPP) to boost infrastructure delivery in Nigeria.

She stated that according to the Nigerian Integrated Infrastructure Masterplan (NIIMP) and Economic Recovery and Growth Plan (ERGP:2017-2020), Nigeria would require the sum of $3 trillion over the next 30 years to bridge the yawning gap.

A review of the federal budgets over the past few years as well as the amount allocated for capital expenditure in each of these years clearly shows that the government’s resources are insufficient for bridging the infrastructure gap in the country.

One such viable option, according to her, is the adoption of PPP arrangements that could enable Nigeria to access significant resources from both local and international investors for investment in Infrastructure.

“Notwithstanding this, we have not been able to fully unlock the potentially huge benefits afforded by PPPs, due to the absence of a comprehensive PPP framework setting out institutional responsibilities, which would provide investors with the necessary comfort to commit capital towards infrastructure development,” she said.

“Please recall that the federal government took the significant a step towards addressing this through a policy pronouncement in the form of circular number SGF .50/S.37/II/749) dated 14th September 2020.

The circular provides the much-needed clarity on federal government institutional roles for PPP arrangements.

The circular stated that the Bureau of Public Enterprises (BPE), the federal government agency tasked with implementing the government’s privatisation programme, as the secretariat to the NCP, shall be responsible for the concession of public enterprises and infrastructure already listed in the first and second schedules of the Public Enterprises Act.

The circular equally stipulates that the BPE shall act on behalf of the federal government as the counterparty on all infrastructure projects being developed on a PPP basis while the Infrastructure Concession Regulatory Commission (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.

According to Mrs Ahmed, it is expected that the new policy direction would remove all forms of ambiguity or concerns, and therefore stimulate investors interests in the country’s infrastructure market.

“As you may be aware, some other initiatives are being taken by government in the PPPs space such as the ongoing review of the guidelines on viability gap funding, and management of contingent liability that has both reached advanced stages.

In addition, from the 2021/2022 budget cycle, all infrastructure projects must be screened for PPP suitability and compliance with National Integrated Infrastructure Master plan by the Federal Ministry of Finance Budget and National Planning and BPE before inclusion in the national budget and subsequent procurement.

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Ihesiulo Grace

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