CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The success of any government lies just not in the volume of its policies but rather the extent to which the policies have been implemented. Nigeria, over the years is characterized by large number of abandoned or uncompleted projects and where completed, they are greatly substandard. Public utilities and industries mostly perform below optimum levels, revenue and or remitted are grossly inadequate with a substantial portion going into private pockets due to corruption. In the light of this dismal performance of the public sector projects and services, the high cost of executing them and the attendant corruption and mismanagement, the Nigeria government ventured into various form of partnership with the private sector with a view to ameliorating most of the problems associated with public projects and service delivery in Nigeria (Burnett, 2010).
However it is unarguable that the country suffers from a huge deficit of infrastructure and the infrastructure which is available is not being adequately utilized. The World Bank recommends that 7-9 percent of the GDP of developing countries like Nigeria should be invested in infrastructure. It should be noted that the exact figure invested in infrastructure annually is not accurate, hence the need for Public-Private Partnership to help bring the country closer to the expected desire of infrastructural development. It should be observed that Nigeria‘s recurrent annual expenditure is over 60% of our national budget, the remaining less than 40% for capital projects cannot deliver the needed good in the nearest future; except proactive steps are taken in pursuing this new initiative, the continuous decay in infrastructure and public goods will be very alarming. In the light of the above, it is evident that the government alone even at the best of times cannot provide infrastructural requirements needed for the economic and infrastructure development of the country, hence, the call for the intervention from the private sector in the provision of public infrastructure. Public private partnership is therefore a necessary and important instrument for the attainment of sustainable economic development. The chairman of Bi-Courtney Group, Dr. Olawale Babalakin recently advocated for more Nigerian private investors to consider entering into the public-private-partnership (PPP) with the government to fasten development and a massive turn around especially in the health sector. (international Journal of Humanities July 2013).
Dr. Babalakin pointed out that if such Public Private Partnership agreement continues in the health sector and other economic sectors of the country that Nigeria will be better as this would greatly increase revenue to the government as well as boost economic activities and growth in the country. In Nigeria and other developing countries, sustainable access to healthcare and other socio-economic services and products can be accomplished through public-private-partnerships, where the government delivers the minimum standard of services, products and or care, the private sector brings skills and core competencies, while donors and business bring funding and other resources (Okpara, 2012). Such collaboration will be especially productive in promoting and enhancing health through partnerships as has been the case with polio eradication and other child immunization efforts. The contribution of Public Private Partnership in the society cannot be overemphasized as it is useful in almost all aspects of life for example Public Private Partnership can be useful in high priority projects as it helps in developing many aspects of the economy. Example, Federal Ministry of Health announced it intension to collaborate with the private sector in the new drug distribution policy in the country
recently approved by the National Council on Health. The implementation of the policy is to reduce proliferation of drugs distribution and access to quality drugs easy and building of health infrastructure for the well-being of citizen.
Furthermore, Nigeria and many other developing countries, the role of government in the provision of public infrastructure and services is enormous. Harris, (2003) mentioned that government in both the developed and developing countries have entrusted the delivery of public infrastructure and services such as: transport, telecommunication, energy, water, sanitation, health, education, policing and defence to state owned monopolies or other public sector/government departments. This monopoly is because most of these services are considered “public goods” and therefore needs to be provided by government especially at a lower cost. However, the huge burdens on government budgets and erratic macroeconomic trends have necessitated government to look for alternative methods of providing these public goods (Chege, 2001). Public Private Partnership (PPP) which is an approach of government collaborating with private firms to provide goods and services has grown as an alternative way to release government from its burden of responsibilities. Farlam, (2005) asserts that, Public Private Partnership is often argued not only to be an approach to government procurement of goods and services but also a more effective way of providing goods and services. This is as a result of the private sector investment and also the view that risk and benefits are borne by both government and the private sector.
In Ghana, the Ministry of Finance and Economic Planning (2011), mentioned in the national policy for PPP that, the approach is not substitute to government’s role in the provision of resources but seeks to complement government’s efforts in providing
infrastructure and quality services. This assertion can be seen in the arrangement between the private and public sectors. However, the collaboration between public and private entities, the role of the public procurement in their activities cannot be ignored. With the Public Procurement Act, Act 663 (2003) clearly establishing key processes for public institution spending, the question is how does the procurement processes influences the effectiveness of PPP. A critical look at the above discussions emphasise the importance of PPP in infrastructural development and in the provision of public goods. However, the partnership of two entities that have different objectives in their operations is likely to cause problems. How does the private sector which is profit motivated work in line with government to perform its responsibilities. It is thus imperative to undertake this study in order to assess the partnership between public and private bodies in fostering infrastructural development in Nigeria most especially federal ministry of health its problems and prospects.
1.2 Statement of the Problem
It is common knowledge that there is serious dearth of infrastructure in Nigeria and that the available ones is grossly inefficient both in terms of delivery as well as maintenance. President Goodluck once announced that Nigeria needs more than US $19 trillion to provide the needed adequate infrastructure (Murray, 2003). This amount cannot be borne by the government. It therefore follows that the government alone cannot even at its optimal level of revenue, satisfy the infrastructural needs of the society. Hence the need and necessity for a partnership of some sort between the government and the private sector with a view to combining resources to provide the infrastructure necessary for the social and economic development of the country.
Burger and Hawkesworth (2011) mentioned that Public Private Partnership has been a window of opportunity for most government to partner with the private sector to assist in fulfilling its mandate of infrastructure and service provision. Notwithstanding the potential of Public Private Partnership to ensure effective provision of public good at an efficient cost level and also effectiveness in terms of quality, there remain the challenges of the two entities merging their strengths in the provision of public goods and services.
However, there is no active PPP in Nigeria in recent years and this however has hampered infrastructural development. There is no good relationship and understanding between the government and private individual companies. Most proposed PPP project are not functional as they are clear cut of government officials planned privatization. Also, the issue of corruption among officials in the area of PPP and government unwillingness to finance and support most PPP projects is another challenge. These and many more are the problems that this research work try to solve.
1.3 Objectives of the Study
The broad objective of the study is to appraise public private partnership and infrastructural development in Nigeria. Specifically, the objectives of the study are to;
(i) ascertain the relationship between public private partnership and infrastructural development in Nigeria;
(ii) ascertain the role played by PPP in infrastructural development; and
(iii) identify the problem and prospects of PPP in Nigeria.
