BY JONAH NWOKPOKU
The Governor, Central Bank of Nigeria, CBN, Mallam Sanusi Lamido Sanusi has listed adequate institutional framework, transparent legislative and regulatory frameworks as preconditions for successful Public Private Partnership, PPP projects.
He stated this while delivering a key note address at the second bi-ennial regional conference of the West African Institute for Financial and Economic Management, WAIFEM which held in Lagos.
He said that PPPs as financing option have emerged as a preferred model for infrastructure financing.
According to him, “PPPs are contractual arrangements that allow for private sector involvement in the supply of infrastructure assets and services. PPPs bring innovative private funds to infrastructure. At their best, they ease budget constraints and raise efficiency by leveraging on private sector management expertise and innovation.”
Sanusi also called for adoption of Infrastructure and Diaspora bonds to tackle the challenge of infrastructure within the West African sub-region.
He noted that in considering infrastructure financing options, a mix of sources which are private and innovative will be needed to close the infrastructure gap.
He said, “There is no ‘one-size-fits-all’ solution. The right mix will depend of factors such as financial development, indebtedness, business environment and preferences in each country.”
He noted that, “Among the innovative financing tools, the use of long term sovereign infrastructure bonds has been successful in raising capital for large scale infrastructure projects in Brazil and other emerging markets such as Chile and Malaysia.”
Speaking further, he said that Diaspora bonds are also an alternative financing instrument under consideration and explained that, “These are bonds issued by a government to nationals residing abroad to tap their savings for the purpose of infrastructure development in the home country,” noting that, “Diaspora bonds have been used successfully in countries such as Israel, which has raised an estimated US$25 billion over the last 30 years through the medium. Also, Ethiopia which has a sizeable Diaspora population and was among the world’s fastest growing economies in the past decade launched its second Diaspora bonds, ‘The Grand Ethiopian Renaissance Dam Bond, in 2011.”