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Toronto, Canada - April 14, 2017



Citizen Engagement initiative in detail and the reasoning behind it

By Dr Baba J Adamu

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Public-private partnerships (PPP) in infrastructure development involve private-sector participation in any or all of the design, construction, financing and operation phases of a public-utility infrastructure, service or both. This initiative is geared toward achieving long-term infrastructure development financing by the private-sector in partnership with the public-sector; thus addressing the societal problem of infrastructure deficits. By engaging the private-sector and giving it well-defined responsibilities; Governments can broaden their options for achieving and delivering better services; faster and more efficient than traditional methods within the fiscal constraints.  

There is a significant co-relation on how infrastructure development contributes to economic growth and to improved quality of life for citizens. In the case of Nigeria, there is the urgent need to address these infrastructure deficits (like power, water, road-rail networks, education, health, etc.), which are very important and cannot wait for the dwindling public resources to finance them all. The objective therefore, is to induce the private-sector to come in; to take the initiation and finance these infrastructure development projects, both in short and long-term, creating enabling-environment for businesses to grow; thus a multiplier-effect on return on investments and a boost to the general economic output, which ultimately leads to positive change.


The digital artifact video has been created specifically with the government, the general public and private investor financiers and all other stakeholders in managing development finances in mind.


Click to view the Digital Artifact video



Yes, Citizen engagement is a game changer for development

The paper discusses the impacts and issues associated with private involvement in infrastructure development projects through formal public-private partnerships (PPPs).  The analysis suggests that in most cases, the private sector will be most efficient in the construction phase but the public sector will be best equipped to handle the risks associated with ownership. However, it is clear that PPPs will not be viable without a concrete frame work to induce private sector involvement in public infrastructural developments.

The paper clearly outlines the need for a concise framework to provide risk mitigation strategies on Public-Private risk-return objectives in order to attract long-term private-investor financing with guaranteed stable rate of return on investment in line with a country’s economic and legal conditions.

Is citizen engagement a game changer for development?

PPP scheme allows the private-sector, which has bulkier resources, to gain, manage and retain control over a facility for a long, pre-specified period of time in order to gain efficiency, cost reliability and financial security. At the end of the contracting period the private-sector would have recouped its costs and achieved the required rate of return. In Nigeria, the private-sector has not been material-contributor to national developments due to sector risk-return. The private-sector assumes substantial risk that would otherwise be held by the public-sector, in exchange for compensation and the public-sector ceding substantial control over the delivery of infrastructure services and associated risks with ownership.

It is therefore necessary for a precise framework to be set-up, outlining the procedures on how private resources can be unlocked and channeled to the financing of long-term development projects while ensuring a meeting point of the public-private risk return objectives. The key players in this regard are government, citizens and the private-sector; with government better placed to spearhead the initiative since the target is to deliver quality service to the citizens. The target audience should include all stakeholders recruited using both “Thin” and “Thick” engagement methods and partner with other organizations or bodies.

Since the traditional procurement of public infrastructure and its related services has given way to private-sector assuming responsibility, the right tool is the criteria for PPP for a suitable framework to assess and control efficiency gain with respect to a country’s economic and legal conditions. The criteria here will enable the initiative to involve the private-sector in the provision of public-services, shifting the role of the public-sector from the owner and provider to purchaser and guardian of the interests of the public, thereby allowing the public-sector to focus on its core functions without placing undue strain on scarce public funds and without having to increase taxation, leaving the private-sector to perform those functions more cost-effectively and efficiently. Such framework is not available in Nigeria or there is inadequate campaign for it.  

The initiative will work when public-sector does not lose its sovereign task such as assessing and determining infrastructure needs, monitoring and supervising of an efficient and competitive procurement system; and assuring all required environmental and safety standards in the service delivery, plus including closing the "feedback loop" between citizens and governments in the process through overpassing existing "accountability gap" by improving the responsiveness of governments to people's requirements.


Risk-Return Relationship versus the Private-Sector opportunity objectives.

The framework should involve efficient risk-mitigation strategies providing the private-sector with investment opportunity and incentives that attract them to provide long-term financing, emphasizing on timing, certainty, stability and size of return on investment, which are usually the main considerations by private-investors to committing finances to projects.

Usually, risk and return have a positive relationship where a higher risky investment may be accompanied by a higher but more uncertain return, thus, private-sector, unless is sure of positive return on investment, maintaining cash flow, high liquidity and profit will hesitate to invest in risky opportunities. Infrastructure-financing are long-term initiatives with challenges in returns; and the longer the timing; the more reluctant profit-making companies will be willing to take risk unless attractive investment incentives are offered. To address these challenges, risk mitigation strategies must be framed to thwart this uncertainty in return on investment thereby encouraging private involvement. This can be achieved by applying blended-financing where a portfolio of financial instruments with correlated returns can be composed to overcome this timing effect. In Nigeria very little has been done in this regard. Other opportunities that can be leveraged in long-term infrastructure financing in Nigeria are addressing endemic corruption, lack of transparency and accountability.


Corruption, lack of Transparency and Accountability:

Nigeria, with over 170 million populations holds huge oil reserves, is hobbled by insecurity, infrastructure-deficit, endemic-corruption, lack of transparency and accountability. Corruption has been a great impediment to national developments from kick-backs and bribes, lack of proper oversight, abandonment of payments for projects, lack of transparency and accountability; and frameworks to assess both long and short-Route to Accountability; to failure to pay taxes. Corruption has undermined the credibility of government, impoverished the country and fuelled insurgency and violence. Citizens have come to believe that their government not only condones corruption, but facilitates it. Moreover, an avenue for illicit financial outflows from the country is corruption that is why the private-sector becomes hesitant to deploy any resources for long-term infrastructure-development. Similarly, donors and other contributors are reluctant to commit due to lack of transparency and accountability, where resources which had been deployed for a particular project are partially or completely not accounted for.



In conclusion, the initiative will succeed with the establishment of a strong framework outlining the scope and guidelines for private-sector participation in financing long-term infrastructure-development projects; using existing metrics/indicators used for the outcomes of development-projects in; measured and toward achieving the most important Sustainable-Development-Goals (SDGs) by year 2030.


Is citizen engagement a game changer for development?


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