In the last few years, two federal agencies–the Bureau of Public Enterprises (BPE) and Infrastructure Concession Regulatory Commission (ICRC) were enmeshed in controversy over who calls the shots on public-private partnership (PPPs) projects. But the recent circular by the federal government has finally cleared the fog, writes Ndubuisi Francis
Analysts have argued that despite a number of laws regulating PPPs, Nigeria is yet to enjoy the influx of foreign direct investments to develop its infrastructure. This is attributable to the existence of a multitude and conflicting web of laws regulating PPPs in the country. There are also a host of institutions trying to regulate the same transactions culminating in constant conflicts between these agencies.
The Secretary to the Government of the Federation (SGF), Boss Mustapha admitted recently that the conflict of responsibility between the BPE and ICRC was traceable to the absence of a clear distinction between the functions of both agencies with dire consequences on investors’ confidence in the Nigerian economy.
In a bid to address the situation, Mustapha in a circular dated September 14, 2020, the SGF clearly delineated the roles the BPE and ICRC, will henceforth play in IPPs’ transactions.
The circular with reference number SGF.50/S.37/II/749,
became necessary to clear any ambiguity or overlap associated with the mandates ascribed to both agencies by their enabling laws.
Prior to the circular, the BPE and ICRC had indulged in what was at best splitting of hairs over whose responsibility it was to oversee PPP transactions.
Incidentally, both agencies are under the purview of the Presidency.
The circular outlined fresh guidelines on how PPP transactions and models for infrastructure development will be managed in Nigeria, going forward, effectively handing over the job of managing PPP transactions to the BPE.
Through the new guidelines, the government also put to rest the lingering conflict of responsibility between the BPE and ICRC on the management of PPP transactions in the country.
In what amounted to an open admittance of contradictions in theIr functions, Mustapha condemned the conflict of responsibility between both agencies, adding that the absence of a clear distinction between the functions of the ICRC and the BPE has consequences on investors’ confidence in the Nigerian economy.
He noted that it was for this reason that the government approved the new guidelines for use in the ‘National Policy on Public Private Partnership (PPP)’ with regards to the roles of the ICRC and BPE in the administration of PPP processes.
The SGF said: “The BPE, in line with the provisions of the Public Enterprises (Privatisation and Commercialisation) order of 2012 as amended, shall: be responsible for the concession of public enterprises and infrastructure already listed in the first and second schedule of the Public Enterprises (Privatisation and Commercialisation) Act, and act on behalf of the federal government, either alone or in conjunction with relevant ministry, agency, corporation of body as the counterparty on all infrastructure projects being developed on a public private partnership basis.”
The ICRC on its part, he added, will “act as the regulatory agency for PPP transactions with powers to inspect, supervise, as well as monitor the projects and process, in order to ensure compliance with relevant laws, policies and regulations.”
In processing any PPP transaction, Mustapha stated that the BPE and other relevant government agencies shall comply with the provisions of the Infrastructure Concession Regulatory Commission Establishment Act of 2005, adding that circular supersedes any other previous directive on the subject.
Before this intervention, the BPE and ICRC had repeatedly contradicted each other on whose responsibility it was to initiate and manage PPP transactions in the country, a situation that may have helped to torpedo potential transactions in this regard.
VP Reaffirms New Roles for BPE, ICRC
To underscore the federal government’s resolve to end the controversy between the BPE and ICRC, the Vice-President, Prof. Yemi Osinbajo stated that with the new circular on the administration of PPP projects in the country, the BPE shall now be responsible for the concession of public enterprises and infrastructure already listed in the First and Second Schedules of the Public Enterprises Act, Vice President and Chairman, National Council on Privatisation (NCP).
Osinbajo, who is the Chairman of the National Council on Privatisation (NCP) spoke at a recent webinar on deepening the Nigerian Infrastructure stock through Public-Private Partnership (PPP), organised by the BPE.
In addition, he said, the BPE shall act on behalf of the federal government of Nigeria (FGN) as the counterparty on all infrastructure projects being developed on a PPP basis while the ICRC continues to act as the regulatory agency for PPP transactions with powers to inspect, supervise and monitor the projects and processes to ensure compliance with relevant laws, policies and regulations.
Osinbajo said it was expected that “this new policy direction would provide clarity to stakeholders and foster the improvement of PPP programmes in the country,” adding that ministries, departments and agencies (MDAs) as well as the multilateral agencies and development partners, were urged to support the PPP policy objectives and institutional arrangements already put up by the government.
He, however, said that the federal government was willing to dialogue and incorporate suggestions from stakeholders with a view to further strengthening Nigeria’s PPP framework.
He added that as part of the new environment being created for the implementation of PPP projects, the federal government through the Central Bank of Nigeria (CBN), Nigerian Sovereign Investment Authority (NSIA) and African Finance Corporation (AFC) and other financial institutions, will be creating a N15 trillion Infrastructure Fund that will help, not only unlock investment from local sources but also attract foreign private investment in infrastructure development.”
BPE Outlines Steps to Showcase Achievements on PPP
Through the implementation of the new federal government’s circular on the administration PPP projects in the country, the BPE has outlined steps, with timelines in the next 12 months to two years; to showcase its collective achievements.
Director General of the privatisation agency, Mr. Alex A. Okoh has said the first step involves the engagement with key MDAs to work out modalities for implementing the circular.
He said, in the first quarter of 2021, the Bureau would develop and circulate a template that would enable MDAs to document all the ongoing PPP transactions and their current status and that the BPE, working together with the MDAs, would host two additional webinars in the first quarter of next year.
“One of the webinars will be targeted at local and international financial institutions, including international development financial institutions. These are the partners that are expected to provide funding to investors in the Nigerian PPP market”, he stated.
According to Okoh, “the second webinar will be targeted at local and foreign construction companies, infrastructure management companies and other investors who are global players in the delivery of infrastructure through PPP arrangements”.
Similarly, he disclosed that in the second quarter of next year, the update or development of Nigeria’s pipeline of PPP projects would be finalised and launched, thus, signalling the commencement of the procurement phase of individual PPP projects across the country.
“Also in the second quarter, a webinar will be held for governors and other sub-national leaders to obtain their buy-in given that they are critical stakeholders in the delivery of infrastructure,” he said.
According to Okoh, the last step would lead to the establishment of Transaction Implementation Committees (TIC) where each of the committees will be established with membership drawn from the BPE and relevant MDAs in the third quarter, with the mandate to deliver specific projects contained in the approved national project pipeline.
He commended President Muhammadu Buhari for the bold and creative approach to infrastructure development in Nigeria even as he thanked the Vice President and Chairman of the NCP, Prof. Yemi Osinbajo for his advice and unrelenting commitment to ensuring that Nigeria is able to unlock investment capital into the infrastructure space, boost economic development and create jobs.