There is a need to create mechanisms and incentives to promote alignment and coordination of private investments with the NIIMP, as the volume of PPP projects in Nigeria significantly lags those of other successful developing economies.
The current PPP framework would be strengthen to foster private sector participation in infrastructure investment.
Key activities include:
■ Empowering a unit to identify potential PPP projects:
– Develop a shortlist of potential projects for PPPs;
– Refine the process to identify future potential PPP projects;
– Introduce standardised tools and analytics to ensure all potential PPP projects are assessed in the same way.
■ Providing financial support to incentivise potential investors:
– Set up a government-backed fund (e.g., government resource fund for infrastructure projects) that will offer financial support to PPPs and boost investor confidence;
– Establish a development finance organisation (like the IDC in South Africa, and IDFC in India) that focuses purely on financing infrastructure projects;
– Mobilise additional sources of revenue that can be used to finance PPPs (e.g., through the Sovereign Wealth Fund).
■ Refining the legal framework to encourage PPP investment:
– Revise the current legal framework to better cater for PPPs (as opposed to mainly focusing on and catering to public projects);
– Standardise PPP procurement frameworks based on international best practice.
■ Incentivising potential investors:
– Offer sector-specific incentives through reduction or removal of import tariffs, tax breaks and subsidies to encourage sector-specific investment;
– Offer revenue guarantees to investors for specific projects (e.g., toll roads).