Regulatory Framework for Public Private Partnerships in Nigeria

27 May 2016

Laura Patonnme Alakija

Nigeria, like most other developing economies in Africa, is looking more and more to Public Private Partnerships (PPPs) to resolve both the social and economic infrastructure deficit. Due to the relative novelty of the concept, some of the initial challenges faced by PPPs in Nigeria were absence of a regulatory framework, insufficient understanding of how PPPs work, a lack of expertise and the inability of financial institutions in Nigeria to provide long term funding for the projects. 

In recent years, the landscape has changed. PPPs in Nigeria are now primarily regulated by the Infrastructure Concession Regulatory Commission (ICRC) Act of 2005. The Act establishes the Commission (s 14), sets out processes and procedure for applying for and securing concessions in Nigeria (Ss 2, 4, 5 &  6), provides a basic framework in the form of guarantees of profitability of PPP projects to the concessionary (Ss 7(1) & (2), 11) and grants the Commission supervisory, regulatory and enforcement powers (Ss 10, 12, 19)

Thus, a plan for coordinated implementation of projects designed to fill the infrastructure gap over a 30 year period, from 2014 to 2043, was introduced by the federal government of Nigeria (FGN) in 2014 and is known as the National Integrated Infrastructure Master Plan (NIIMP). The NIIPM underpins infrastructure development in Nigeria in the short to mid-term. The scope of its application is nationwide development of new infrastructures and expansion or renovation of existing assets in the fields of Power Generation and Transmission/Distribution Networks, Roads and Bridges, Ports, Railways, Inland Container Depots and Logistics Hubs, and Healthcare Facilities, amongst others. 

In addition to the ICRC Act and the NIIPM, PPPs in Nigeria are also regulated by:

  • Public Procurement Act 2015 – deals with overall public sector procurement practices.
  • Federal Roads Maintenance Agency Act, Cap. F38, LFN1 2004 and the Federal Highways Act, Cap. F13, LFN 2004 dealing with planning, construction, maintenance and supervision of the use of all road infrastructure built by the FGN.
  • Fiscal Responsibility Act 2007 deals with prudent management of the Nation’s resources. In this instance, government investment in infrastructure.
  • Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, Cap. F34, LFN 2004 – deals with exchange controls and repatriation of funds invested in Nigeria.
  • National Inland Waterways Authority Act, Cap. N47, LFN2004 deals with the development, improvement, regulation of the use of Nigeria’s inland water ways.
  • Nigerian Investment Promotion Commission Act, Cap.N117, LFN 2004 deals with the coordination of all foreign investments in Nigeria including investments in infrastructure. 
  • National Office for Technology Acquisition and Promotion Act, Cap. N62, LFN 2004 deals with use of foreign technology, which is otherwise not available, in Nigeria.

At federal level, PPPs are regulated by a chain of ICRC Act and NIIPM and a series of specific laws adapted by individual states to suit their particular infrastructure needs. Lagos State, for instance, is regarded as the model state for adoption of the both the NIIPM and ICRC Act and implementation of a PPP framework at state level. Lagos state laws on PPPs include: the Public Private Partnership Law 2011, which repealed the Lagos State Roads (Private Sector Participation) Authority Law 2007; and the Lagos State Roads, Bridges and Highway Infrastructure Law 2005.

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[1] Laws of the Federation of Nigeria