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Aug 2, 2019

Public-Private Partnerships – Panacea To Economic Development & Change



Public-private partnerships involve collaboration between a government agency and a private-sector company that can be used to finance, build, and operate projects, such as public transportation networks, parks, and convention centers. Popular PPPs in Nigeria include the Muritala Mohammed Airport (MM2) in Lagos, the Lekki – Epe Expressway and the Ikoyi – Lekki link bridge in Ikoyi, Lagos.

The most important advantage of PPPs is the alternative it provides for government to find alternative funding for infrastructure. Recently, Nigeria’s Vice President, Prof. Yemi Osibajo stated that Nigeria needs over a trillion naira to cover its infrastructural deficit with this current administration claiming that it has spent about $10 Million on infrastructure within the past 4 years[i].

Public-private partnerships typically have contract periods of 25 to 30 years or longer. Financing comes partly from the private sector but requires payments from the public sector and/or users over the project's lifetime. The private partner participates in designing, completing, implementing, and funding the project, while the public partner focuses on defining and monitoring compliance with the objectives. Risks are distributed between the public and private partners according to the ability of each to assess, control, and cope with them[ii]

Private-sector technology and innovation, for example, can help provide better public services through improved operational efficiency. The public sector, for its part, provides incentives for the private sector to deliver projects on time and within budget. In addition, creating economic diversification makes the country more competitive in facilitating its infrastructure base and boosting associated construction, equipment, support services, and other businesses. 

There are downsides, too. Physical infrastructure, such as roads or railways, involve construction risks. If the product is not delivered on time, exceeds cost estimates, or has technical defects, the private partner typically bears the burden. With regard to the advantages and opportunities available to Nigeria by virtue of PPP Agreements, it is safe to say that PPP will be a panacea to economic recovery and development in Nigeria.

This and much more would be discussed at the NBA Annual General Conference coming up between the 23rd and 29th of August, 2019. Do ensure you participate in this session.

@Legalnaija





[i] Premium Times . (2018 ). Buhari govt has invested $10bn in infrastructure — Osinbajo. Available: https://www.premiumtimesng.com/business/business-news/269403-buhari-govt-has-invested-10bn-in-infrastructure-osinbajo.html. Last accessed 2nd August, 2019.

[ii] Will Kenton . (2019). Public Private Partnerships . Available: https://www.investopedia.com/terms/p/public-private-partnerships.asp. Last accessed 3rd August, 2019 .
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