Challenges to implementing PPP projects in Nigeria 4

PPP projects are complex and often require strong fiscal and predictable regulatory frameworks, which is not present in some sub-national governments in Nigeria. The absence of regulatory frameworks in these governments at this level or where they exist absence of clarity increases unpredictability, and reduces attractiveness of available PPP opportunities within these  States .  The resulting increased risks may lead to lower confidence by prospective private parties, demands for sovereign or other government guarantees, which may end up passing what should be private sector borne risks to government. This can be a disincentive for investment. Given the  drop in statutory revenues and the huge revenue gap that face most sub-national governments, PPPs present good opportunities for infrastructure development and financing for states. States that want to tap into these opportunities need to first set out a clear framework for undertaking PPPs. Additionally they may need to proactively identify and prepare viable projects by undertaking related studies and investigations and preparing appropriate information packages that will support open bidding. Also it may help to allow for unsolicited proposals, whilst ensuring that a procedure exists to  ensure it is not abused. Do you know a situation where weak regulatory framework has affected a proposed PPP project within a sub-national government in Nigeria?

 

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