Anthony Areh
Capital market stakeholders have stressed the need for strategic collaboration between the public and private sectors for flexible and accessibility of funds through the market to finance infrastructure projects.
This was part of resolutions released through a communiqué at the end of the fifth Budget Seminar webinar organised by the Securities and Exchange Commission (SEC) in Abuja.
In the communique read by Mr Okey Umeano, Head, Office of the Chief Economist of SEC, the stakeholders noted that the private sector involvement through the Public Private Partnership (PPP) was critical.
Umeano said this was necessary in view of the Federal Government’s recognition of the power and transport sectors as key to economic development.
According to him, the development of infrastructure in the country has primarily been through the traditional forms of contract awards by the government, through budgetary allocation.
He explained that the success of PPP lied on creating an enabling environment adding that the public sector needed to prepare a well-structured and bankable PPP to attract private investments.
The stakeholders also said that there was need for the government to reduce her on-balance sheet borrowing.
“A valid alternative to full dependence on revenue from natural resources is to develop a mechanism where the capital market can provide funding for key sectors of the economy.
“Funding for sector such as the power and there is also a need to create an enabling environment for investors to invest in this sector which will benefit the nation as a whole.
“Infrastructure development and financing should be made more inclusive and ensure that all relevant sectors of the economy are addressed,” Umeano said.
He said that government expenditure should focus on revenue generating projects with clear financing plans.
Umeano also suggested the need to create alternative pools of national savings different from pension funds.
“Given the reality of severe capital shortage over the medium-term, foreign funding options which cannot be overlooked, there is the need to create alternate pools of national savings different from pension funds,’’ Umeano said.
