Capital market capable of funding PPP infrastructure projects
By Patience Ikpeme
The Securities and Exchange Commission (SEC) has assured that the Nigerian Capital Market is well-equipped to fund infrastructure projects in the country through Public-Private Partnerships (PPP).
This assurance was given by the Director-General of the SEC Mr. Lamido Yuguda during the 2023 Chartered Institute of Stockbrokers (CIS) National Workshop
Yuguda said the Commission’s assertion is supported by a World Bank report, which highlights Nigeria’s low level of public spending on infrastructure and the resulting infrastructure gap which have resulted in low quality infrastructure as well as restricted access to essential services.
The Director-General of the Securities and Exchange Commission (SEC), represented by the Executive Commissioner, Corporate Services, Ibrahim Boyi, emphasized the urgent need for a new approach to financing infrastructure development in Nigeria.
He explained that, at the current rate of capital expenditure, it would take approximately 300 years to bridge the infrastructure gap in the country.
To address this challenge, the Director-General stressed the importance of leveraging public-private partnerships and highlighted the crucial role that the capital market can play in this regard.
He pointed out that the capital market, with its patient capital and established project financing options, is well-suited to finance PPP infrastructure projects at various levels.
To illustrate this, he referenced the common model used in many developed countries where governments and private sector partners raise debt capital for PPP projects through bonds and loans.
This approach allows for the efficient funding of infrastructure projects while sharing the risks and rewards between the public and private sectors.
Overall, it was emphasized that by harnessing the potential of the capital market and utilizing public-private partnerships, Nigeria can effectively address its infrastructure deficit and drive economic growth.
The capital markets Yuguda said play a crucial role in the success of PPP projects by providing funding, risk management tools, liquidity, and efficient allocation of resources.
“They enable governments and private sector partners to leverage their strengths and resources to deliver essential public infrastructure and services”.
He then commended the CIS for its contribution to the development of the economy through the provision of skills and expertise in the financial sector. These skills and expertise he noted are essential for the success of PPP projects.
