ALP Seminar 5
PPP and infrastructural development: Accelerating the diversification of Nigeria’s economy
PPP and infrastructural development: Accelerating the diversification of Nigeria’s economy. This was the theme for ALP’s fifth business Seminar which took place last week Tuesday (26th April) at the Oriental Hotel. The challenge which Nigeria’s infrastructure deficit poses was examined by an excellent array of speakers and panelists in three sessions from 9 to 2pm.
The keynote addresses were deployed by Mr. Opuiyo Oforiokuma MD/CEO of ARM-Harith Infrastructure Investment Ltd – “Creating a conducive environment for successful PPP in Nigeria”; Mr. Patrick Mgbenwelu Head of Debt Solutions for FBN Quest who looked at ‘’Attracting FDI and fresh funding into the infrastructure industry”and Dr. Ousmane Dore Country Director for African Development Bank who examined the impact of infrastructure under the title ‘’Translating Infrastructural gains into Economic Growth’’ The ALP Seminar series is conceived in 2012 by Akindelano Legal practitioners as a forum for discourse about commercial, practical and legal issues facing Nigeria’s businesses as Nigeria seeks to navigate its way into a modern economy. In the past it has examines the indigenous Oil and Gas industry and the reformation of the Power sector. This year’s seminar sought to involve delegates and panelists from the public sector as well as the private sector. Active of the panelists was Mr. Emanuel Onwodi the Head of the Special projects for the Infrastructure Concessionary and Regulatory Commission (ICRC) and delegates from the Federal Ministry for Justice, The Federal Ministry for Works and Industry as well as the Lagos State PPP office.
Other panelists were corporate professionals from the investment banking, advisory and Insurance industry including Mr. Dayo Alao Senior Project Manager for Nigerian Infrastructure Advisory Facility (Advisers to the Federal Government on Infrastructure); Rachel More Vice President Rand Merchant Bank; Olufunmi Amanwa Leadway Insurance; Mr. Olusola Lawson Africa Infrastructure Investment Managers (AIIM) Oladale Ajayi-Bembe Akindelano Legal Practitioners (ALP) and Mr. Adekalu Balogun PWC.
The presentation by Mr. Oforiokuma looked at PPP in the local context and in the global context. He made to point that PPP is a global phenomenon, but Nigeria must develop its own brand consistent with the economic realities of the country and its peculiar idiosyncrasies. He cited the example of the US$876 Million Azura- Edo project which required funding from local and international investors involving a World Bank partial Risk Guarantee and a Put-Call agreement with the Federal Ministry of Finance to cover termination scenarios. Azura took four years to come to financial close however it is an encouraging beacon which other infrastructure projects involving public and private companies must learn from. He cited Energy Transport and Telecoms as some of the strongest areas in Nigeria for PPP projects. Mr. Oforiokuma closed with comments about the recent China- Nigeria Trade deal and the likely impact on PPPs in Nigeria.
According to Mr. Patrick Mgbenwelu, the one thing which was common to infrastructure project finance and PPP projects, both the local and global context is that there will always be funding for a good project and that success of PPP projects is in the preparation. In his delivery Dr. Dore (AfDB) said that up until 2014 Nigeria’s GDP grew at an average 7% per annum. In 2015 it took a nose dive to 2.8%. He quoted the Global Competitiveness Index for 2015 which states that inadequate infrastructure is the largest impediment for doing business in Nigeria. About 70% of the 193,000 km of roads in the country is in poor condition with the AfDB infrastructure Action Plan estimating US$2.9 billion is needed annually for routine and periodic maintenance. He said the AfDB has set up a number of initiatives to help develop PPP in Nigeria the formulation of policy advisory and legal framework within various levels of Government. The most prominent being the African Legal Support Facility (ALSF)