Public Private Partnership (PPP) as an anchor for diversifying the Nigeria economy

Federal Government releases 2016 Fiscal Policy Measures

Lagos Container Terminals Concession as a Case Study

Across Africa, the Public Private Partnership (PPP) model has become increasingly critical as both a funding and operational mechanism for social (e.g. hospitals and schools) and economic infrastructures such as ports, railways, roads and airports. The public partner is typically represented by the government at a national, state, or local agency level. The private partner can be a privately-owned business or consortium of businesses with a specific area of expertise.

PPP is applicable to medium to long-term management contracts with investment requirements which may include funding, planning, building, operation, maintenance and divestiture. PPP arrangements are particularly useful for large complex infrastructure projects that require highly-skilled workers and a significant capital outlay to execute. The PPP model is also useful in countries that require the state to legally hold an interest in any public infrastructure but permits a level of private sector participation.

There are different models of PPP depending on the level of public sector control and also the depth of private sector’s participation – e.g. funding, rehabilitation, building, operations and maintenance of the assets. Examples of PPP projects and models deployed in Nigeria include:

Nigeria’s Economy and the need for diversification

The Nigerian Economy has been negatively impacted by fluctuating oil prices. The recent economic downturn has also impacted the Federal Government’s ability to fund both capital and recurrent expenditure –including servicing of long-term financing.:

Trade is one of the highest contributors to Nigeria’s GDP and the majority of Nigeria’s import/ export goods are transported via the ports. The table below shows the 2016 trade statistics:

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