Title: Law as a catalyst for stimulating investor sentiments among low to middle-income individuals in the development of infrastructure in Nigeria
Abstract: As countries across the globe are confronted with the cost intensive nature of building, upgrading, and maintaining public infrastructure, they turn to non-traditional approaches to funding infrastructural development, in an environment of budget deficits and other constraints. Competing demands for state funds make it imperative for the state to seek alternative sources of financing for public projects. One way of addressing this need is through project partnerships between the public sector and the private sector.
The infrastructure gap in many African countries is much wider than what the government infrastructure budget can address. In the case of Nigeria, the government has accepted that private funding and involvement in the development of public infrastructure is essential for the economy to thrive. Consequently, the country announced a public-private partnership policy in 2005. However, policy no matter how well researched and drafted requires the force of law if it is to be implemented effectively. Thus, the Nigerian legislature passed the Infrastructure Concession and Regulatory Commission Act 2005 to provide a framework for the participation of private entities in the funding of infrastructure in the country.
This paper examines the role the law has played thus far in structuring a partnership between the public sector and the private sector in the delivery of public infrastructure. The paper notes that as is, the law promotes the participation of both foreign and local investors in infrastructure procurement in the country. In practice however, only high net worth individuals and institutions are involved in funding PPPs.
The argument of the paper is that mutual funds, by way of unit trust schemes, should be encouraged by law to pool funds in smaller thresholds from low to middle income earners in infrastructure funds. This would in turn give smaller investors ownership opportunity in those assets. The market in Nigeria is quite large and schemes that target the lower end of the market would achieve two objectives: firstly, greater acceptance of the policy and secondly, the benefit of returns on investment.
Publication Year: 2017
Publication Date: 2017-09-01
Language: en
Type: article
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Cited By Count: 1
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