The role of law in the successful completion of public-private partnership projects in Nigeria: lessons from South Africa

Over the years, shortage of funds has resulted in a huge deficit in government budgets for infrastructure, especially in sub-Saharan Africa. Due to the huge costs involved in infrastructure procurement in relation to other competing demands on government spending, it is no longer feasible for governments to bear the entire burden of infrastructural development. This is especially the case in Nigeria, where annual infrastructure deficit is estimated at a massive $8 billion. Moreover, public officials have demonstrated incompetence in making public corporations profitable. Accordingly, Nigeria has adopted the public-private partnership model of infrastructure procurement to allow for the participation of the private sector in the design, funding, construction, management, and operation of public infrastructure. However, Nigeria’s legal framework for managing public-private partnership is not clearly defined, leading to gaps in policy and overlapping laws that make implementation of PPP very difficult. Unsurprisingly, public-private partnership in Nigeria have, thus far, produced mixed results, thereby raising a need for clear policy guidelines on streamlining overlapping laws to attract, sustain and reward investor interest. In what ways do Nigeria’s legal and policy framework for public-private partnership protect private investors’ funds? This study examines the concept of PPP and its practice in Nigeria, arguing that the regulatory framework be designed or enhanced to protect investors’ assets in public-private partnership projects and ensure they achieve proportional return on investments. Beyond the problem of overlapping laws, the study finds that political interference, weak institutional mechanisms and poor respect for the rule of law and sanctity of contract underlie the ineffectiveness of public-private partnership in Nigeria. Drawing from the public-private partnership experience in South Africa, it recommends holistic strategies for protecting investors’ assets and unlocking the local financial market for sourcing project funding. These strategies are notably the provision of guarantees, making the process less cumbersome, provision of incentives for investors and project companies and ensuring that the host community for public-private partnership projects are involved in the process from inception to operation to get their support