FG Admits PPP’s Failure, Says Revenue Projections Unattainable

Minister of Finance, Mrs Zainab Ahmed
  • 12 MDAs gulp N1.33trn for capital projects

BY COBHAM NSA, ABUJA – The Federal Government has admitted that the much-touted Public Private Partnership (PPP) projects have sadly failed to gain the expected traction in Nigeria.

According to the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, the PPP projects’ letdown is attributable to policy framework deficiency, poor designs and preparation of relevant documents to make proposed projects attractive to potential investors.

She said the situation among other factors have been largely responsible for investors’ lukewarmness and disinterest in consummating the projects’ implementation.

Similarly, Mrs Ahmed also confessed the country will be unable to reach 80 per cent revenue performance for 2019, saying actual aggregate revenue for 2019 as at middle of the year amounted to N2.04 trillion, representing only 58 per cent of the projected target.

Speaking at the 2020 budget breakdown in Abuja on Monday, where she unveiled government’s plans to spend a total of N10.33 trillion, Mrs Ahmed said efforts are however geared towards better preparation of future PPP projects to gain investors’ buy-in going forward.

Further acknowledging challenges faced in executing PPP projects over the years, the Minister said; “It is true that PPP has not succeeded in Nigeria. We have done quite a lot. But very few have succeeded and the reason is because we are not preparing the projects well enough. We noticed that there is a gap and we have been working even with Development partners to support MDAs that have eligible PPP projects in their packaging. This is expected to enhance our ability to attract private sector investments for these projects.

Mrs Ahmed, who agreed that PPP projects’ preparation remains the weakest link in the process, said government has therefore provided special economic zones, under the Ministry of Industry Trade and Investment as well as the Presidential Development Fund domiciled under the National Investment Authority (NSIA) to address the noticeable lapses.

“What is in the budget that I can directly refer you to is the special economic zone under the Ministry of Industry Trade and Investment and also the provision that we have the Presidential Development Fund which currently lies on a PPP basis by the National Sovereign Investment Authority (NSIA).  

“But in the infrastructure ministries, there are several projects that are suitable for PPP. I know that on an annual basis, they actually extract projects that are suitable for PPP and give it to Infrastructure Concession Regulatory Commission (ICRC)”, the Minister stated.

On government’s worries over poor revenue output, the Minister said; “It is clear that we cannot reach even 80 per cent and that is why we have to do several things to make sure that revenue performance is enhanced”, the Minister maintained

She said of the figure, oil revenue brought in N900 billion; Company Income Tax (CIT) – N349.11 billion; Value Added Tax (VAT) – N81.36 billion; and Customs Collections N184.10 billion.

“As to whether we will reach the N8.33 trillion at the end of 2019 is very unlikely and that is why we have to make special efforts to boost revenue performance.

Mrs Ahmed also stated that as part of government resolve to improve infrastructure development, over N1,322.92 trillion has been allocated for capital expenditure in 12 top MDAs.

She listed them to include: Federal Ministry of Works and Housing – N259.2 billion; Ministry of Power – N127.67 billion; Federal Ministry of Transportation – N123.07 billion; Federal Ministry of Education – N162.7 billion; and Ministry of Defence – N99.87 billion and Federal Ministry of Health – N90.98 billion

Other are: Federal Ministry of Agriculture – N79.79 billion; Federal Ministry of Humanitarian Affairs, Disaster Management and Social Development – N45.45 billion; Federal Ministry of Aviation – N53.85 billion; Federal Ministry of Water Resources – N78.34 billion; Federal Ministry of Industry, Trade and Investment – N41,34 billion and Federal Ministry of Science and Technology – N37.55 billion.

Also dropping hints on looted funds, Mrs Ahmed said government is projecting about N237 billion from this source to fund the 2020 budget

The Minister said; “On the recovery of looted funds, if you look at the budget, we have a provision of N237 billion as a financing item in the budget. This is our projection of how much would be recovered as looted funds. These are funds that will now be available to fund the budget.”

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