Project – The effect of public private partnership policy on the Nigerian infrastructural development

CHAPTER ONE

INTRODUCTION

• Background to the Study

Public-private partnerships (PPPs) have been increasingly recognized as a critical tool for infrastructural development in Nigeria. The PPP policy, which involves a contractual agreement between the government and a private entity, has been implemented to address the infrastructural deficit in the country (Akintoye, Beck, & Hardcastle, 2003). The policy has been instrumental in mobilizing private sector resources and expertise to improve public infrastructure and services. The Nigerian government has adopted PPPs in various sectors, including transportation, energy, and healthcare, to enhance the quality and accessibility of public services (Oyedele, 2012).

The impact of the PPP policy on Nigerian infrastructural development has been significant. According to a study by Iheanacho (2016), the implementation of PPPs has led to substantial improvements in the country’s infrastructure, particularly in the transportation sector. The study found that PPP projects, such as the Lekki-Epe Expressway and the Murtala Muhammed Airport Terminal 2, have not only improved the quality of infrastructure but also contributed to economic growth and development.

However, the effectiveness of the PPP policy in Nigeria has been a subject of debate. Some studies suggest that while PPPs have the potential to enhance infrastructural development, their success depends on various factors, including the regulatory environment, the capacity of the private sector, and the transparency and accountability of the process (Oyedele, 2012). For instance, a study by Umar, Kasim, and Martin (2018) found that the lack of a robust regulatory framework and the limited capacity of the private sector have hindered the effectiveness of PPPs in Nigeria.

 

Despite these challenges, the PPP policy has been instrumental in attracting foreign direct investment (FDI) into the Nigerian infrastructure sector. According to the World Bank (2017), PPPs have played a significant role in attracting FDI, particularly in the energy sector. The report noted that the Nigerian government’s commitment to PPPs has boosted investor confidence and facilitated the inflow of foreign capital into the country.

Nevertheless, the PPP policy in Nigeria has been criticized for its focus on profit-making rather than public interest. Critics argue that the policy has led to the commercialization of public services, thereby making them inaccessible to the poor (Oyedele, 2012). Moreover, there are concerns about the transparency and accountability of PPP projects, with some studies suggesting that they are prone to corruption and mismanagement (Umar, Kasim, & Martin, 2018).

Furthermore, while the PPP policy has contributed to infrastructural development in Nigeria, its effectiveness is contingent on various factors. There is a need for a robust regulatory framework, capacity building in the private sector, and greater transparency and accountability in the implementation of PPP projects. Future research should focus on these areas to enhance the effectiveness of the PPP policy in Nigeria.

• Statement of the Problem

The problem of infrastructural development in Nigeria is a complex one, with numerous factors contributing to its current state. One such factor is the implementation of public-private partnership (PPP) policies. Despite the potential benefits of PPPs, there is a lack of comprehensive research on their impact on Nigerian infrastructural development (Oyedele, 2012).

The first issue is the unclear role of PPPs in infrastructural development. While the Nigerian government has embraced PPPs as a means to address infrastructural deficits, there is a lack of clarity on how these partnerships should be structured and implemented (Akintoye et al., 2013). This lack of clarity can lead to inefficiencies and mismanagement, undermining the potential benefits of PPPs.

Secondly, there is a problem of inadequate regulatory frameworks. The Nigerian Infrastructure Concession Regulatory Commission (NICRC), the body responsible for regulating PPPs, has been criticized for its lack of capacity and effectiveness (Ibem and Aduwo, 2013). This has raised concerns about the ability of the government to effectively oversee and manage PPPs.

Thirdly, there is a problem of risk allocation. In many PPP projects, the private sector is expected to bear a significant portion of the risk. However, in the Nigerian context, this risk allocation is often skewed towards the private sector, which can deter potential investors (Oyedele, 2012).

Fourthly, there is a problem of transparency and accountability. There have been numerous allegations of corruption and mismanagement in PPP projects in Nigeria, which has undermined public trust in these partnerships (Ibem and Aduwo, 2013).

Lastly, there is a problem of capacity. Many Nigerian institutions lack the technical and managerial capacity to effectively implement and manage PPP projects (Akintoye et al., 2013). This has resulted in numerous project failures and delays.

• Aim and Objectives of the Study

The aim of the study is to examine the effect of public private partnership policy on the Nigerian infrastructural development. The specific objectives are:

1. To examine the extent to which public-private partnership policy has influenced infrastructural development in Nigeria.
2. To find out areas of infrastructural development that have been most impacted by public-private partnership policy in Nigeria.
3. To assess the effectiveness of public-private partnership policy in addressing the infrastructural deficit in Nigeria.
4. To examine the challenges of implementing public-private partnership policy in the Nigerian infrastructural development.

• Research Questions

The research questions are buttressed below:

1. To what extent has the public-private partnership policy influenced infrastructural development in Nigeria?
2. Which areas of infrastructural development have been most impacted by the public-private partnership policy in Nigeria?
3. How effective has the public-private partnership policy been in addressing the infrastructural deficit in Nigeria?
4. What are the challenges of implementing the public-private partnership policy in the Nigerian infrastructural development?

1.5 Research Hypothesis

The hypothetical statement is stated below:

Ho: Public-private partnership policy has no significant influence on infrastructural development in Nigeria.

H1: Public-private partnership policy has significant influence on infrastructural development in Nigeria.

• Significance of the Study

The significance of studying the effect of public-private partnership policy on Nigerian infrastructural development cannot be overstated. Firstly, this study will provide a comprehensive understanding of the role that public-private partnerships (PPPs) play in infrastructural development. It will shed light on the extent to which these partnerships have been successful in driving infrastructural growth and addressing the infrastructural deficit in Nigeria.

Secondly, the study will identify the areas of infrastructural development that have been most impacted by PPPs. This will help policymakers and stakeholders to understand where these partnerships have been most effective and where there is room for improvement. It will also provide insights into the types of infrastructure projects that are most suitable for PPPs.

Thirdly, the study will assess the effectiveness of the public-private partnership policy in Nigeria. This will provide valuable information for policymakers, enabling them to make informed decisions about the future direction of the policy. It will also provide insights into the challenges and obstacles that need to be overcome to make the policy more effective.

Fourthly, the study will examine the challenges of implementing public-private partnership policy in Nigeria. This will provide valuable insights into the practical difficulties faced by both public and private sector actors in implementing these partnerships. It will also suggest ways to overcome these challenges and make the implementation of the policy more effective.

Fifthly, the study will contribute to the existing body of knowledge on public-private partnerships and infrastructural development. It will provide new empirical evidence on the impact of PPPs in a developing country context, which is currently lacking in the literature.

Finally, the findings of the study will have practical implications for both public and private sector actors involved in infrastructural development. It will provide them with valuable insights that can be used to improve the effectiveness of their partnership arrangements, ultimately contributing to the development of better infrastructure in Nigeria.

1.7. Scope of the Study

The study examines the effect of public private partnership policy on the Nigerian infrastructural development.

1.8. Operational Definition of Terms

“Effect” generally refers to a change that is a result or consequence of an action or other cause. In this context, it refers to the outcome or impact of the public-private partnership policy on infrastructural development in Nigeria.

 “Public Partnership Policy” refers to a government policy that encourages collaboration between public entities (like government agencies) and private entities (like businesses or non-profit organizations) to accomplish a shared goal. This policy is often used to leverage the strengths of both sectors for the benefit of the public.

“Private Partnership Policy” is a policy that encourages collaboration between private entities to achieve a common goal. This could involve businesses, non-profit organizations, or individuals working together. In the context of this study, it’s likely referring to the private sector’s role within a public-private partnership.

“Infrastructural Development” refers to the construction and improvement of physical systems and structures that are essential for a society to function. This can include transportation systems (like roads and bridges), utilities (like water and electricity), and public buildings (like schools and hospitals). In the context of Nigeria, infrastructural development is a key aspect of economic growth and societal advancement.

Project – The effect of public private partnership policy on the Nigerian infrastructural development