World Bank expresses shock as Nigeria shuns $450m PPP facility

Posted by admin Africa & World Politics, Latest Politics Wednesday, May 15th, 2013

AS the Federal Government struggles to manage its wide budgetary deficits owing to dwindling revenue, top functionaries in Ministries, Departments and Agencies ( MDAs) have rejected offers of alternative financing for infrastructural projects from the World Bank through any form of Public, Private Partnership (PPP).

This indication emerged Tuesday when the World Bank expressed shock that the Nigerian Government has refused to draw down on a $450 million facility meant to institutionalize the operations of a PPP regime in Nigeria.

Specifically, the facility according to the bank would assist the country in reducing the cost of infrastructure financing; channel available resources to key social needs that could directly affect the welfare of Nigerians as well as drastically reduce the country’s high debt portfolio which at the moment stands cumulatively at $48.496 billion an equivalent of N7.554 trillion as at end December 2012, according to the Debt Management Office figures.

The Guardian learnt that most of the debt instruments were reportedly contracted to fund projects in the Budgets that private funds could do under a viable PPP regime.

World Bank Sector Manager, Finance and Private Sector Development (Western & Central African countries), Paul Noumba, who expressed the Bank’s shock said the faculty has been lying fallow for the past three years, signifying the lack of interest of government in the PPP regime that was introduced by the late President Musa Yar’Adua Administration.

Noumba made the position of the World Bank known Tuesday, when he led a team to the Bureau of Public Enterprises ( BPE) to lay the Bank’s frustration and to find out from the BPE which of the Nigerian Government agency was appropriate to domicile the Project Implementation Unit (PIU) of the Public/ Private Partnership Projects (PPPs) in Nigeria.

The Guardian, Tuesday, learnt from sources close to the World Bank and the Infrastructure Concession and Regulatory Commission ( ICRC), the PPP regulatory body in Nigeria that part of the seeming failure of the ICRC pioneer Director- General , Dr. Mansur Ahmed to deliver on his mandate was allegedly masterminded by the MDAs functionaries who effectively ‘blocked ‘ their projects from the ICRC for preparation and execution under the PPP window and insisted that the projects be funded direct from Government’s allocation where they would have total control of resources and award for the projects.

The World Bank source who asked not to be named yesterday said: “It is really disturbing that the Nigerian Government with a huge infrastructure deficit appears not to be interested in PPP which could save her a lot of money to tackle other challenges. The Government has even frustrated even the World Bank’s attempt to collaborate with them on some projects to set example on the benefits of a PPP.

“Specifically, we approached the Government to lease the Lagos – Ibadan expressway to us on a PPP, arrangement, that was about three years ago. They foot- dragged. When we realize they were not too enthusiastic, we say okay, lets unbundle it, give us the Lagos -Sagamu section while the Government does the Sagamu -Abeokuta section, still they turned down the offer and later offered it to Babalakin which they have also terminated while the road has remained in bad shape with the attendant risk to road users, added the source.

Noumba said that Nigeria was the first country that the World Bank picked for a pilot project for PPPs but regretted that for three years, funds released for the purpose had been lying fallow.

He explained that as a result of the non-utilisation of the fund, the World Bank had decided to restructure and scale it down to $25million at the first instance to take care of technical assistance and capacity building while in phase two, it would release $85million.The initial ratio was $150 million and $300million.

He pledged the World Bank’s assistance to the Bureau in the areas of advisory services, manpower development and funding in some of its transactions like the commercialization of the Federal Housing Authority, privatisation of the Abuja Stock and Commodities Exchange the eight reform bills being fine-tuned for presentation to the National Assembly.

Acting Director General of the BPE, Benjamin Ezra Dikki equally expressed shock noting that for reforms to succeed in any country there must be a strong political will at the top and asserted that the present administration had shown strong political will in that direction.

Dikki then advised the World Bank to domicile the PIU in the Bureau as the law

establishing BPE gives it the mandate to execute PPPs through concessioning/commercialization.

He added that the successful concessioning of the country’s 24 ports by the Bureau was a clear testimony of its capability to handle PPPs.

He said already the Bureau had made a presentation to its bosses on the need to domicile the PIU in the privatisation agency.

The Guardian also learnt that the World Bank’s action is coming on the heels of a partnership which it has just entered with the ICRC on enthroning transparency and competitiveness in the concessioning of infrastructure processes in the country so as to attract investors .

Author of this article: From Mathias Okwe,

-Guardianwp_posts