Fate of Nigeria’s Infrastructure Master Plan Worries NESG

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Obinna Chima
The Nigerian Economic Summit Group (NESG) has expressed concern about the fate of the federal government’s National Integrated Infrastructure Master Plan (NIIMP) as the current administration’s willingness to review and implement the plan remains bleak.

The group was also worried about the lack of clear strategic direction regarding infrastructure investment in Nigeria.

To this end, the NESG urged the government to review the NIIMP so that it would be “in line with current realities and future targets for infrastructure.”
The NESG made this recommendation in its policy brief for August 2017, obtained on Monday.

“As it stands, Nigeria’s overall plan on infrastructure, which is littered in different isolated and often unrelated policy documents, remains unclear,” it stressed.

Therefore, the NESG advised the federal government to develop a clear and coordinated policy direction for infrastructure development in order to demonstrate commitment to transforming the country.

According to the group, not only would the review provide a sense of direction for the government in terms of spending priorities, it would also enhance the confidence level of potential investors in future Public-Private Partnership (PPP) arrangements.
As done in some countries, the master plan provides the basis upon which PPP projects are selected.

But the group argued that ideally, Nigeria’s National PPP Policy should be situated on the country’s infrastructure master plan, which defines the long-term commitment of the government to develop the country’s infrastructure and identifies the required investments in infrastructure in line with the country’s aspiration.

They cited the situation in Ghana, where the PPP policy states that a project to be executed by the government must be in a sector identified by the National Infrastructure Plan.

“Also, Senegal has a solid legal and regulatory framework that ensures strict adherence to the provision of the national infrastructure plan as a guide to PPP project execution. Nigeria could also adopt similar act. Nigeria needs a PPP law and PPP specific legislations.

“Based on countries’ experiences, although a PPP legislation is not necessary for successful PPPs, its relevance cannot be undermined due to the need to control the PPP structure within government and demonstrate government’s commitment to PPPs,” the report added.

According to the NIIMP approved in 2015, Nigeria requires a total investment of US$3 trillion over the next 30 years to build and maintain infrastructure across the country.

This stands at US$100 billion (N38 trillion) annually. This is almost three times larger than the combined overall budget expenditure of both the federal and state governments.

“With such a huge deficit, it is no doubt that Nigeria needs alternative and innovative methods of financing infrastructure development. PPPs are one of such models, which have been explored by many countries across the world,” it added.
Furthermore, the NESG stated the Nigeria’s economic crisis of 2016, which resulted in lower federal and state government revenues, points to the obvious that the government alone cannot fund the country’s infrastructure deficit.

They noted that more than ever was the need to explore private capital.
“Interestingly, the Nigerian government acknowledges the importance and potentials of PPPs in delivering specific infrastructure projects. For instance, in the recently released Economic Recovery & Growth Plan (ERGP), the government emphasised the use of PPPs to deliver critical projects, such as roads, rail, seaports and airports. “In addition, the proposed Family Homes Fund by the government, which is designed to improve access to social housing, is expected to operate as a PPP to the tune of about N1 trillion.

“While PPPs explore private capital in the provision of infrastructure and reduces the financial burden of the government in delivering such projects, one of the key features of PPPs lies in their ability to relieve the government of any major cost associated with financing projects,” it stated.
They identified some of the challenges facing PPPs to include policy, legal, institutional and regulatory bottlenecks.

“The absence of ‘sound’ policy, regulatory and legal framework for PPPs Nigeria has a National PPP Policy (NP4). The policy document sets out government’s commitment towards PPPs, the PPP policy objectives as well as the institutional structure and processes for managing PPPs in Nigeria.

“While Nigeria seems to have taken a leap of faith in formulating the NP4 and establishing the Infrastructure Concession and Regulatory Commission (ICRC), there is currently no holistic legislation guiding PPPs in Nigeria.

“Given Nigeria’s volatile political environment characterised by policy inconsistency where new administrations could discontinue projects approved by its predecessors, PPP legislation becomes vital in establishing the legal framework for a successful PPP program,” it added.