By: Theresa Moses
Nigeria’s infrastructure deficit, estimated to be around $3 trillion, can be bridged through effective de-risking of Public Private Partnerships (PPPs), according to Mr. Adeniyi Duale, Partner at Duale, Ovia & Alex-Adedipe.
Speaking at the February Breakfast Forum organized by the Nigeria-South Africa Chamber of Commerce (NSACC), at Eko Hotel and Suites on Thursday, February 27th, 2025, Mr. Duale emphasized the importance of de-risking PPPs in Nigeria’s infrastructure sector.
He noted that the inadequate regulatory frameworks, transparency, and access to finance are major obstacles to infrastructure development.
Mr. Duale recommended the development of effective regulatory frameworks, risk management mechanisms, transparency, and accountability, as well as capacity building and leveraging international financing mechanisms to de-risk PPPs in Nigeria.
He also emphasized the importance of risk management mechanisms, noting that identifying, assessing, and mitigating risks associated with PPP projects is critical for de-risking.
While explaining further, “Transparency and accountability are also essential for building trust and confidence in PPPs. This includes ensuring that PPP projects are aligned with national development goals and that stakeholders are held accountable for their actions.”
Public Private Partnerships (PPPs) have proven effective globally in addressing infrastructure challenges. Emerging economies such as Rwanda, Kenya, and South Africa, have successfully utilized PPPs to fund and deliver large-scale infrastructure projects.
Nigeria can replicate this model by fostering partnerships with international development banks, local governments, and private investors. This approach will not only enable the construction of critical infrastructure but also promote sustainable economic growth and development for future generations.
However, during the course of the discourse, various key benefits of PPPs in Nigeria were highlighted which included: Increased access to funding and technical expertise; Improved infrastructure development and delivery; Enhanced economic growth and development; Job creation and poverty reduction; and Increased private sector participation in infrastructure development.
Some of the key risk factors associated with PPPs in Nigeria include financing risks, exchange rate volatilities, construction/cost overruns, regulatory/licensing risks, Nigeria risks, inflation, community resistance, and political risks.
To mitigate these risks, Mr. Duale recommended the use of de-risking mechanisms such as currency fluctuations impacting derivatives/hedging instruments, offshore reserve accounts, stabilization clauses, and proactive regulator engagement.
He also emphasized the importance of having proper financial advisors, project development phase, and effective concession agreements to ensure the success of PPP projects in Nigeria.
In his conclusion, Mr. Duale emphasized the need for effective de-risking mechanisms to unlock Nigeria’s infrastructure potential through PPPs. He noted that with the right regulatory frameworks, risk management mechanisms, and international financing mechanisms, Nigeria can bridge its infrastructure gap and promote sustainable economic growth and development.
“The NSACC is committed to promoting economic growth and development in Nigeria and South Africa,” said Dr. Ije Jidenma, Chairman of the NSACC. “We believe that PPPs have the potential to play a critical role in bridging Nigeria’s infrastructure gap, and we are committed to supporting stakeholders in this effort.”
The event was sponsored by Duale, Ovia & Alex-Adedipe, a specialized law firm that provides a wide range of services to clients including corporations, multinationals, local and foreign investors, financial institutions, institutional investors, government and government agencies and foreign law firms.
The event was moderated by the Vice Chairman, Mr. Ajibola Olomola.
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