Need for PPP in sustainable social infrastructure provisions
Big infrastructure projects are, by their nature, social investments, especially in developing markets, where the provision of basic services is often lagging far behind the needs of fast growing populations. The provision of power, water and transportation infrastructure are often taken for granted in the developed world, but serve an undeniable social purpose in Africa. The electricity that we deliver to rural villages can be the difference between a school student’s ability to do his homework or not. The water we supply dramatically affects the health of those given access to it. Similarly, the roads, bridges and railway lines we construct make it easier for people to get to their respective destinations. The jobs that are created by infrastructure projects themselves deliver a social return and we are proud that in Lagos about 423,000 jobs have been created on infrastructure projects over the last three (3) years. These are the considerations that we take into account when examining each and every one of the projects we embarked on.
Infrastructure in Africa and PPP
Lagos is not alone in Africa in having to address a vast infrastructure challenge. The World Bank estimate is that Africa faces infrastructure investment deficit annually of US$93 billion for at least a decade. That is far beyond the capacity of African governments to address alone. Alternative sources of finance must be found, wherever we are on the continent and so, while providing a social good, infrastructure projects are increasingly required to also deliver a commercial return to those willing to invest in it as an asset class. One of the most impressive achievements in the infrastructure space over the last decade has been the ability to deliver on projects that attract international investment. De-risking infrastructure investment in Africa, while delivering a strong commercial return, means that going forwards, we should be able to attract more and more of the investment we need to bridge the gap.
Historical background of PPP in Lagos
In 1999, following the return to democracy and the election of Asiwaju Bola Tinubu as the Governor of Lagos State, the revenue of the state was certainly not enough to deal with challenges facing the state. Our revenue generating ability was limited and the needs of our citizens immense. It was clear that unless a financial re-engineering took place we would neither have the resources, nor the capacity to deliver on what it takes to build the city. I have been lucky e,,,,,,,nough to serve in both the administrations of the Asiwaju, and his successor, the current Executive Governor of Lagos State, Babatunde Raji Fashola and I am proud to have been involved in delivering such a revolution.
Using PPP for social infrastructure?
Classically, the concept of PPP in social infrastructure is about leveraging the capacity and skill of the private sector to enhance the delivery of social services such as education, health, shelter and security. All of these are equally important to the future development and prosperity of Lagos and its people. Many people often misinterpret this as the need to build physical assets, like hospitals and schools. The reality is that it can be much simpler than that. Let me give you a few examples: As the commercial nerve centre of Nigeria, Lagos is home to some of the world’s largest companies as well as our own emerging indigenous private sector with a rapidly growing need for skilled labour.
Every private sector leader I meet with is crying out for improvements in the relevance and skill by our university and polytechnic graduates. Therefore, it becomes imperative to revamp and restructure our education curricula with a view to ensuring students acquire the right skills for employment, entrepreneurship and innovation, and we need to provide greater access to technical and vocational training. By doing so with a forward looking understanding of the needs of the private sector (a partnership) we can drastically improve the skills of our young people, and so their ability to secure sustainable employment, but also support even faster economic growth.
I am of the opinion that better educated workforce will only increase our ability to attract investment. As such, we partnered with Samsung to build an academy that teaches electronics at a practical level. Besides, we have the following infrastructure to boost our water provision: Akute 10.15 MW plant, necessitated by the need to stop fueling with 33000 liters of diesel; Island IPP supplying electricity to government facilities such as General Hospital, Island Maternity and a host of others; Alausa IPP supplying government offices with constant power.
Finally, our vision for Lagos is to create a Mega City of the future. To do that, we have to make decisions that show we have a ‘Mega Hear’. The social impact of the projects we initiate is the only true rationale for delivering them. Our challenge is to match the delivery methods to the expectations of our people.