SEC assures Nigerian capital market can finance PPP infra projects

The Nigerian capital market has the capacity and is well positioned to raise the finance required to execute public-private partnership (PPP) infrastructure projects in the country, Lamido Yuguda, the director-general, Securities and Exchange Commission (SEC), has assured.

He gave the assurance in a remark he made at the 2023 Chartered Institute of Stockbrokers (CIS) National Workshop held in Abuja, recently.

Speaking on the theme, “leveraging the capital market to drive public-private partnership for effective national economic growth,” Yuguda, citing a World Bank report, pointed out that Nigeria’s current level of public spending on infrastructure is one of the lowest globally and added that this lack of investment has resulted in a significant infrastructure gap, which has adversely affected the quality of infrastructure and limited access to essential services.

Represented by Ibrahim Boyi, executive commissioner, corporate services, Yuguda highlighted that given the current rate of capital expenditure, it would take approximately 300 years to bridge Nigeria’s infrastructure gap.

He said there was now a need for a new approach to financing infrastructure development in Nigeria to stimulate economic growth and argued that leveraging public-private partnerships is essential, and the capital market can play a crucial role in this regard.

The SEC chief explained that the capital market, with its patient capital and established project financing options, is well-suited to finance PPP infrastructure projects at various levels. He cited the common model used in many developed countries, where governments and private sector partners raise debt capital for PPP projects through bonds and loans.

He said: “This is an infrastructure financing model that is a common choice in many developed nations of the world. Capital markets allow governments and private sector partners to raise debt capital for PPP projects. Governments can issue bonds to finance their share of the project costs while private companies can secure loans or issue corporate bonds for their contributions.

“The capital market’s ability to provide funding, risk management tools, liquidity, and efficient allocation of resources makes it a crucial partner in the success of PPP projects. It allows governments and private sector partners to leverage their strengths and resources to deliver essential public infrastructure and services,” Yuguda noted.

He commended the CIS for its role in developing the economy by equipping individuals and organisations with the necessary skills and expertise in the financial sector, which is crucial for the success of PPP projects.