Experts want private sector in government spending on infrastructure

Experts have called for the creation of a right environment to ensure that private sector capital involvement to complement the government spending in the building of infrastructure.

They argued that part of the reasons why the impacts of money spent by the Federal Government on infrastructure in the federation have not been felt is largely caused by the huge funding gap that is needed.

Indeed, the Federal Government through the Minister of Finance, Mrs. Kemi Adeosun recently disclosed that it has inject N750biilion on infrastructure in the last five months with intent to spend more before the end of the year.

The experts agreed that the infrastructure deficit is huge stating that majority of the fund were used in settling debts to contractors owed in past years.

Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, said between the times the funds were released and the time the impact is should felt, there would be a lag.

For such impact to be felt in the country, Yusuf noted that government should create the right environment to ensure that private sector capital involvement to supplement or compliment the government spending.

His words: “We need to create more rooms for public private partnership in the infrastructure areas so that more private sector capital can come into that space. It could be domestic private sector capital; it could be also foreign sector private capital because government alone cannot fix it because the funds are not there. They gaps are so huge. Apart from government trying to privatize what it has, what needs to be done is to also quickly accelerate a framework for public partnership so that we can see more private sector capital coming into infrastructure space”

A financial analyst, Johnson Chukwu, said why the impact of the money is not felt is because the value of Naira has been massively devalued, adding, “the impact of such money today could have been an equivalent impact of about 200billion this time last year.

“So in terms of purchasing power of the currency have eroded by the devaluation we witnessed. The money government is spending does not have full impact is because the value has been eroded.”

He argued that the impact and real value of the expenditure has been eroded by close to 60 per cent because inflation has moved from 9.6 per cent in January to 18.3 per cent in October in inflation rate.

He said the expenditure might have been scattered to so many projects.

“No projects have received enough funding as to achieve reasonable management, adding that the public does not have a feel of a specific project that the government has invested in massively,” he explained.

On his part, Public Affairs analyst and development consultant, Jide Ojo, noted that the bulk of the money was accrued to payment of debt to construction companies.

“Earlier in the year when the budget was passed, government said it was going to ensure that contractors were mobilized to site. As we speak, I heard from chairman, association of local contractors that the Federal Government owes them N7trillion. The bulk of that was owed by previous administration,” he said.

He stated that there were different committees of the National Assembly that over sight department and agencies and it is their duties and constitutional responsibility to ensure that the releases are monitored and ensure that they are not diverted or mismanaged.

Ojo further argued that there is the need for an expanded executive and legislative oversight, civil society and the media to ensure that all government spending are monitored and that money are followed unrelentingly.