Govt, private partnership will boost infrastructure financing – Minister
By Seun Ibiyemi
The Minister for Transportation, Rotimi Amaechi has affirmed that government-private partnership will boost the financing and delivery of infrastructure to Nigerian populace.
The Minister of state for Transportation Sen. Gbemisola Saraki who represented Rotimi Amaechi made this known while speaking in Abuja on Tuesday at a 2-day National Conference on Transportation Infrastructure Development Financing in Nigeria organized by the Nigerian Institute of Transport Technology (NITT).
The Minister noted that the government alone cannot finance the transport sector considering its capital intensive nature and as such government keeps yearning for private sector involvement to achieve her goals.
“it is pertinent to state that the establishment of these Transport infrastructures are capital intensive as such, Government keeps clamouring for Private Sector Investment, Joint Venture financing and other financing strategies to ease Government Expenditure.
“To this end, various methods have been devised in financing transport infrastructures. These include: User’s charges, Taxation, Appropriation, Concessioning through Build Operate and Transfer (BOT), Build, Own, Operate and Transfer (BOOT), among other privatization methods.”
Highlighting the gains of the government-private partnership thus far, Amaechi said.
“In the Rail Subsector, a co-financing loan agreement was signed by the China Export Import Bank to finance some Rail Projects. Similarly, in the Maritime Subsector, Concession Agreements have been signed by Terminal Operators, and other private Sector Companies for the development of the Inland dry Ports and deep-sea Ports.
“I am also aware that financing and investment strategies have also been incorporated in the Draft National Transport Policy currently being reviewed for the development of the modes of transportation particularly the Road subsector.”
He further opined, that the choice of this theme is apt considering the global economic downturn due to dwindling oil prices, thus, affirming the need for economic diversification.
“I am optimistic that the team of experts and participants assembled in this hall today will come up with strategies and a sustainable financing framework for the development of the Nation’s Transport Infrastructure.
Speaking on the theme: “Sustainable Funding for Transport Infrastructure Development in Nigeria.” The Minister of Finance, Budget, and National Planning Dr. Zainab Ahmed noted that “ the sole financing to support infrastructure projects by the government has led to increasingly large budget deficits, a form of financing which is unsustainable in the long term.”
According to Ahmed, “The phrase, Public Private Partnership or PPP is now a part of our daily lexicon, but it represents a unique opportunity to benefit from the expertise present in the private sector to deliver infrastructure projects in a timely and cost-effective manner.
Similarly, she added that it allows Government to share the burden of financing, building and maintaining infrastructure which frees up scarce resources to address other needs best delivered by the Government.
“I strongly believe that infrastructure financing delivered solely by the public sector is a thing of the past,” the Minister said.
