Examining Public-Private Partnership in Nigeria: Potentials and Challenges
Chapter One
OBJECTIVES OF STUDY
The average Nigerian is suspicious of PPP and is usually of the belief that it is a means of transferring power or control of the nation among a favored few, they refuse to see and appreciate the burden encountered by the private sector and public in ensuring the availability of a lasting and well functioning infrastructure which can better and faster be achieved through PPP. It is therefore expected that the result of this study is to enlighten and or educate those persons ignorant of what PPP is actually about and its mode of operation.
CHAPTER TWO
HISTORICAL BACKGROUND OF PUBLIC PRIVATE
PARTNERSHIP IN NIGERIA
INTRODUCTION
Public-Private Partnership is a long-term contractual agreement between a government agency and a private partner for the delivery of goods or services. As partners, each party shares in the potential risks and rewards inherent in the delivery of the goods or service, including financial risks and responsibilities, and quality assurances for the taxpayer. Public-Private Partnerships are not privatizations because the government entity involved in the agreement retains control and ownership of the project.
The essence of a public private partnership is to improve infrastructural provision in a region or particular place which of course is needed to provide for the citizens and or for supplementary development which can be through the different modes of public private partnership
IMPORTANCE OF PUBLIC PRIVATE PARTNERSHIP
The development of infrastructure is arguably the single most important factor for economic development as infrastructural facilities are the wheels on which any economy runs and it provides the enabling environment for sustained economic growth and wealth.
In Nigeria, it is unarguable that the country suffers from a huge deficit of infrastructure and the infrastructure which is available is not being satisfactorily utilized.
The late President Musa Yar‟Adua recently announced that the country needs more than US $19 trillion to provide the needed adequate infrastructure in Nigeria and the aggregate estimate for federation account receipts for the year 2009 was N4.529 trillion which is approximately US$3 billion and Nigeria‟s annual GDP of approximately US$300 billion is less than 2% of this figure. The foreign reserves which rose to an all time high of about US$62 billion in 2008 and is now less than US$50 billion is approximately an insignificant .
The World Bank recommends that 7-9 percent of the GDP of developing countries like Nigeria should be invested in infrastructure while. The exact figure invested in infrastructure annually though not accurate, it is unlikely that Nigeria has ever attained the recommended percentage and this is especially so considering the fact that 7-9 percent of the Nigeria‟s is almost equivalent to the gross annual revenues of government from which recurrent and other non-infrastructure related capital expenditure is incurred.
In the light of the above stated, it is evident that the government alone even at the best of times can‟t afford to provide infrastructural requirements which is needed for the economic development of a country, thus there is the call for the intervention of the private sector. Public private partnership is therefore a necessary and important instrument for the attainment of sustainable economic development.
In most countries, the rationale to undertake projects e.g. e-government and ICT are compelling. All levels of government require modernization, new technologies, better efficiency, and improved services for citizens and customers. However, many of the upgrades and modernization required is not only capital intensive and expensive, but is also complex to manage and outside of the scope and skill-set of most government agencies. By having the private sector perform an e-government or ICT service, on behalf of the government, a potential “win-win” solution can be realized where the private sector finances and operates a system, the government is in a better position to “ensure” effective delivery of the service, and the customer/citizen is receiving a higher quality service and is engaged more constructively in customer interfaces with the public sector.
CHAPTER THREE
ADVANTAGES OF PUBLIC PRIVATE PARTNERSHIP
INTRODUCTION:
Infrastructure is the basic physical and organizational structures needed for the operation of a society or enterprise,20 or the services and facilities necessary for an economy to function.21 The term typically refers to the technical structures that support a society, such as roads, water supply, sewers, electrical grids, telecommunications, and so forth. Viewed functionally, infrastructure facilitates the production of goods and services; for example, roads enable the transport of raw materials to a factory, and also for the distribution of finished products to markets and basic social services such as schools and hospitals.22 In military parlance, the term refers to the buildings and permanent installations necessary for the support, redeployment, and operation of military forces.23
CHAPTER FOUR
PROBLEMS AND CHALLENGES OF PUBLIC PRIVATE
PARTNERSHIP
INTRODUCTION
Despite trillions of dollars provided by the taxpayers in public bailouts and much more in accommodative actions by central banks, financial institutions around the world, including many of those behind Public private partnership projects continue to teeter on the brink of insolvency. It was only effective public nationalization of major banks and financial institutions in a number of countries that managed to save the world‟s financial system from collapsing around the world thereby almost causing the end of pubic private partnership projects.
CHAPTER FIVE
CONCLUSION AND RECOMMENDATION
CONCLUSION:
This work has essentially focused on potentials and challenges of public private partnership placing its search light on its nature and types, going further to talk on the benefits and challenges facing PPP within and without Nigeria including among others regulatory, legal, political funding and cultural issues.
I believe it is now understood what exactly public private partnership is all about, that it is not just a process of siphoning money or for controlling of the government by particular set of people but is a very essential tool in community development.
RECOMMENDATION:
The importance of public private partnership cannot be overemphasized thus government must commit itself making provision of those materials that can facilitate an orderly development of PPP for example providing a strong framework for the private sector in order to build their confidence in the scheme.
Public opinion should be properly managed and assurance should be made to enlightening and educating the public as an important stakeholder by constantly disseminating information to the public at large.
The capital market should be developed and deepen and powerfully empowered such that it will suit the necessities and requirements of the public private partnership projects and also, political, regulatory and economic stability should be ensured.
The government should enhance laws, regulations and institutions or put in place new ones where needed and improve the environment to achieve better participation and encouragement of the private sector in the provision of better infrastructures to the community. It is the expectation that with the enactment of specific laws on privately financed infrastructure projects, there will be greater private participation in infrastructure provision and development thereby bringing about the much needed infrastructural development in a developing economy such as Nigeria. Though the Infrastructure Law and the Infrastructure Concession Regulatory Commission (Establishment, etc.) Act, which are all laws on privately financed infrastructure projects, have not fully adopted all the principles contained in the recommendations of UNCITRAL on privately financed infrastructure projects, it is believed that the enactment of the various legislations on privately financed infrastructure projects is a welcome development and there will be further improvements in the laws in the future.
BIBLIOGRAPHY
ARTICLES ON THE INTERNET
- . „News: Public building can do more to tackle climate change.‟ Retrieved
- March 2007, from http://www.cabe.org.uk/default.aspx?contentitemid=1835.Accessed 26 March 2007
- http://www.merriam-webster.com/dictionary/concession Accessed 7 May 2011
- 1„Infrastructure‟ Online Compact Oxford English Dictionary, http://www.askoxford.com/concise_oed/infrastructure accessed 17 January, 2009
- „Infrastructure‟ JP1-02, Department of Defense Dictionary of Military and Associated Terms, p. 260, 12 April 2001 rev. 31 August 2005 http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA439918&Location=U2&doc=GetTRDoc.pdf accessed January, 2009
- Public private partnership <www.wikipedia.org/publicprivatepartnership> Accessed on 12 February 2010
- Sullivan, arthur; Steven M. Sheffrin. Economics: Principles in action. UpperSaddle River, New Jersey 07458: Pearson Prentice Hall. pp474 ISBN 0-13-063085-3http://www.pearsonschool.com/index.cfm?locator=PSZ3R9&PMDbSiteId=2781 &PMDbSolutionId=6724&PMDbCategoryId=&PMDbProgramId=12881&level= Accessed 12 March 2009
- Online Etymology Dictionary. Douglas Harper, Historian. http://dictionary.reference.com/browse/infrastructure, Accessed: 7 May 2011
- The Etymology of Infrastructure and the Infrastructure of the Internet, Stephen Lewis on his blog Hag Pak Sak, posted September 22, 2008. http://hakpaksak.wordpress.com/2008/09/22/the-etymology-of-infrastructure-and-the-infrastructure-of-the-internet/ accessed: 17 January, 2008
