Anthony Sykes is the Director, Global Board, International Project Finance Association, (IPFA). . In this interview with Moses Nosike of Saturday Vanguard Business, he states what Nigeria stands to gain from IPFA if it develops its Public Private Parnership market, PPP; and also why Nigeria is a market that nobody can afford to ignore. Excerpts:
IPFA has been established in Nigeria,whatâ€™s the attraction?
I think that the huge and diverse continent of Africa offers three regions of clear business opportunity which are inherently attractive to the international market.
First, South and Southern Africa have, for a long time, been viewed very positively because of the strength of the South African economy, together with the competitive South African capital market and established banking sector.
Secondly North AfricaÂ offers strong and well established regional economies, while, of course, being dominated by French and Francophone interests.
Thirdly, and importantly, NigeriaÂ and West Africa, because of the oil and gas resources, has an increased size and growth ofÂ population. Nigeria is a market that nobody can afford to ignore. IPFA needs to become established in the vast and vibrant Nigerian market which urgently needs to stimulate private sector investment in the nationâ€™s infrastructure.
What does Nigeria stand to benefit from IPFA?
IPFA is an independent, not-for-profit organisation. It will provide the Nigerian PPP sector with a source of innovative ideas, a medium of information exchange and a lobbying group to promote the Nigerian PPP sector. Nigeria, I believe, urgently needs to increase private sector investment, and IPFAâ€™s aim is to facilitate the development of PPP activity inside Nigeria, by providing a forum for communicating PPP understanding, and developing public awareness ofÂ the benefits that PPP brings.
Based on this, how would youÂ rate Nigerian PPP market in Africa?
The Nigerian PPP market could be very attractive. What really matters for NigeriaÂ and indeed elsewhere in the world – right now,Â is that after the financial crisis, Nigerian projects are made attractive to international investors, lenders and construction companies. These international PPP players should be encouraged to regard Nigerian projects as being relatively more attractive than other projects elsewhere in the world.
Nigeria faces a big challenge to compete with the rest of the world ,Â to attract the attention of investors, sponsors and lenders and thatâ€™s where the IPFA is trying to help. IPFA is able to help Nigeria to make its projects moreÂ bankable,Â more suitable and attractive to international investors.
There are not too many infrastructural projects needing finance in Nigeria, what do you think is responsible for that?
There are too many of them and they are often very poorly thought through. Offering inadequate projects to the international market will not only not lead to unsuccessful transactions, but also undermine the whole credibility of Nigeriaâ€™s PPP sector.
Nigeria is growing fast, and, therefore, it has a lot of needs and itâ€™s difficult for states and FG governments to be able to meet all those needs at the same time. State and FG governments need to look at those needs and understand where private sector can play a role, and where it canâ€™t play a role, then Government needs to prioritise those projects because Government has to manage the pipeline of projects to ensure that the projects which are presented to the international market are â€œbankableâ€ and are not too numerous to be digested by the international players.
What would be your advice if Nigeria wants to be a destination for infrastructure investment?
It has to ensure that its projects meet international best practice in PPP and are bankable.
Nigeria also should try to meet lendersâ€™ objectives to allocate their dwindling capital to support core clients, in core markets and in core sectors, particularly in power, transport and water. Nigeria has to make itself a core market for investors, lenders and project companies. Nigeria also needs to provide banks with opportunities to optimise the use of capital in a profit-maximizing way.
IFIs, DFIs and other supranational agencies need to offer products to reduce or remove the capital weight of project finance lending for international banks.
In this way Nigeria could become the PPP â€œdestination of choiceâ€ for the international PPP players. IPFA is here to help Nigeria do that.