The federal government has declared that Nigeria will need $3trillion in the next 30 years to reduce its infrastructural deficit.
The Vice President, Yemi Osinbajo, made this known while speaking at a webinar organized by the Bureau of Public Enterprises (BPE).
The webinar was focused on the roles of Public-Private Partnership (PPP) in developing Nigerian infrastructure.
Osinbajo noted that there is a need for the country to adopt new models of investments for infrastructural developments.
The vice president said relying on public expenditure alone is not sustainable, adding that the country still faces a huge infrastructural deficit, despite government investment which is a roadblock to rapid economic growth.
According to him, “The Federal Government recognizes this fact, which is why we are considering other approaches to complement and boost financing for the development and maintenance of infrastructure in Nigeria.
“It is clear that this deficit can only be made up by private investment. The private sector is 92 percent of GDP, while the public sector is a mere 8 percent. So, the synergy between the public and private sector through Public-Private Partnerships (PPP) is really a realistic solution.
“The fact that only N2.49 trillion was appropriated for capital expenditure in 2020, reflects the importance of deliberate and pragmatic action to boost infrastructural spending.
“It seems to me to be quite clear that the financial outlay and management capability required for infrastructural development and service delivery outstrip the financial and technical resources available to the government.
“In other words, the traditional method of building infrastructure through budgetary allocations is inadequate and set to become harder because of increasingly limited fiscal space.”
Osinbajo added that the government recently issued a statement on the administration of PPP projects in the country to provide the much-needed clarity.
He said “The federal government has recently issued a circular on the administration of PPP projects in the country to provide the much-needed clarity.
“The circular re-emphasises that the BPE 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.”