By Nkechi Isaac, Abuja
The acting president of Nigeria, Prof. Yemi Osinbajo, has called for a Public Private Partnership (PPP) to bridge the infrastructural deficit in Nigeria and other African countries.
Speaking at the 10th anniversary of the Africa Finance Corporation (AFC) yesterday in Abuja, Osibanjo noted that governments, especially in African countries, can no longer meet their infrastructural needs due to huge deficits and sovereign debts.
“It is important to mention also how in the past most nations, especially African countries were able to pay up for infrastructure projects in one way or the other. But that sovereign risk environment is changing quickly. Governments had always in the past been the largest contributor to infrastructure even when payments were always never really smooth, but they were able to offer sovereign guarantees or cash support.
“But today, that is no longer forthcoming given the huge deficits and sovereign debts that most governments now experience.”
According to him, “There is no question at all that all of what is required, all of what we need will not be provided just by government, government cannot finance the huge infrastructure needs of most countries. As a matter of fact, without the private sector, it is completely impossible for government to finance all the infrastructure needs.”
The acting president commend the AFC for the excellent work they have done in the past ten years, even as he urged them and other international multilateral Development Financing Institutions (DFIs), to show great leadership by taking the greater risk and finding new ways of engaging with African governments.
“We cannot forget that unless corporations like AFC recognise that what is important to do in these times, the next 10 years will indeed be very difficult years for our economies, for the African economy. We will be relying on AFC, our own DFIs to do much more; we will be relying on them to show much leadership to take greater risks,” he stated.
Speaking on the “The Infrastructure Revolution: Where Next?” Nigeria’s minister of finance, Kemi Adeosun, who noted that PPP has a chequered history in Nigeria, said the federal government was looking at ways to amend it to attract more private sector investment.
“We need to bring in the private sector, PPP has a chequered history in Nigeria but we have to make it work, we have to look at why it did not work and fix what needs to be fixed and we believe that’s where AFC has to come in to bring in wider markets.”
Adeosun was joined by ministers of trade and economy from Nigeria, The Gambia and Uganda respectively to debate some of the industry’s key challenges and opportunities, including how to make infrastructure projects bankable.
Earlier, the president and chief executive of AFC, Andrew Alli, who opened the summit on Monday, commented on the importance of project development expertise in African infrastructure investment.
“The earliest stage of conception and development of any project is crucial. Private capital will not come to invest in African infrastructure if projects are not sustainable and bankable.
“By focusing on supporting project development and using our local knowledge and sector expertise to identify and mitigate risks, we can help accelerate the number of viable, bankable projects across the continent, creating the market for other forms of capital to follow, and ultimately bridge the investment divide that currently exists,” he said.
At the summit, AFC also launched its pioneering infrastructure investment report in conjunction with Boston Consulting Group (BCG). The report proposes guidelines for the public and private sector for investing in infrastructure and highlights best practiced case studies in the industry including Cenpower Kpone IPP, Ghana, and Henri Konan Bédié Bridge, Côte d’Ivoire.
The summit is sponsored by international law firm, Hogan Lovells; a professional services company, KPMG; an international petroleum group, Petrolin Group; and leading credit and political risk Insurance Broker, Texel Finance Limited
By Nkechi Isaac, Abuja