Why government can’t fund projects, by Babalakin, experts

Nigeria may remain impoverished and continue to move at a very slow pace, if Public-Private Partnership (PPP) is not encouraged and the rule of law upheld.
This was part of the submissions on Tuesday at the fourth edition of the Akindelano Legal Practitioners (ALP) Seminar Series, when top finance and legal experts gathered at the Oriental Hotel in Lekki, Lagos, to x-ray major commercial, legal and practical issues facing Nigerian businesses.
Speaking on “Suitability of PPPs in the Nigerian Terrain”, one of the panelists, Dr. Wale Babalakin (SAN), said: “Nigeria is not a rich country. In the last three years, Nigeria’s total revenue has been equal to its total expenditure, so money spent on capital projects are being borrowed. The government is bankrupt, so it will never be able to fund major projects. No federal road has been completed in less than 10 years.
“At the opening of the Murtala Muhammed Airport Two (MMA2) in May, 2007, I said the greatest challenges we faced were ignorance, malicious refusal to understand and malice. The government failed to honour the agreement on MMA2 from day one and started competing with us. The Federal Airports Authority of Nigeria (FAAN), a regulatory body, was also acting as an operator. Government closed the General Aviation Terminal, but a new minister opened it for competition, thereby reducing our revenue. We went for arbitration and they ruled in our favour. We went to court, fighting about six parties, and won all the cases. The Federal High Court, Abuja, awarded damages of N132 billion to us, but the government is yet to pay or honour the agreement. We were stopped from building a hotel and conference centre at the airport for no reason, but the ban was raised two weeks ago. One of the things keeping us going at MMA2 is a set of lawyers who have been fighting passionately.
“The case of the Lagos/Ibadan Expressway is worse. I had a meeting with the former President, Goodluck Jonathan, on a Friday and he told me to go ahead with the project, but the project was stopped the following Tuesday. It’s time to stop pretending and start upholding the rule of law. If PPPs are not encouraged, the country will remain impoverished and continue to move at a very slow pace.”
Speaking on the topic, “Attracting Finance for PPP Projects in a Globally Competitive Market,” the Director-General/CEO of the Infrastructure Concession Regulatory Commission (ICRC), Mr. Aminu Diko, identified insecurity, inconsistent government policies, lack of respect for the rule of law and lack of capacity in the supervising government agencies as the four major challenges facing effective private sector participation in economic development.
Diko said government’s failure to honour concession agreements was responsible for the myriad of litigations arising from PPPs.
The keynote speaker and Chairman, Altra Capital Ltd (UK), Mr. John Davie, discussed why banks are not lending.
He said the single most important thing that sponsors must do to be taken seriously by the financial world “is to prepare very high quality business plans which come from using experienced advisers”.
Other panelists at the seminar include the Managing Director, Investment Banking, United Capital Plc, Mr. Wale Shonibare; the Co-Head, Infrastructure Finance at Rand Merchant Bank, Nigeria, Mr. Ato Gyasi; Managing Director, Travant Capital Partners, Sanyade Okoli; Country Manager, International Finance Corporation (IFC), Nigeria, Ms Eme Essien, and the Managing Director of Infrastructure Bank Plc, Mr. Adekunle Abdulrasaq Oyinloye, who urged government to look for alternative finance mechanism by partnering with the private sector.