Acting President Yemi Osinbajo on Tuesday solicited private and public sector partnership to boost infrastructure financing in Africa.
He made the appeal while opening the African Infrastructure Summit, organised by the African Finance Corporation (AFC) in collaboration with the Federal Government in Abuja.
At the event, tagged “Infrastructure Revolution” to mark the 10th anniversary of AFC, Osinbajo called for a new thinking between AFC and Direct Foreign Investment (DFI) partners to save the continent from huge infrastructure deficit.
“So the times certainly call for new thinking.
“AFC and DFI partners must now begin to look for new ways of engaging with the African governments, giving the difficult things and problems that are now clearly the case.
“Unless corporations like AFC recognise what is important to do in these times, the next 10 years will indeed be very difficult for our own economies, for African economies.
“We will be relying on AFCs, especially our own DFIs to do much more; we will be relying on them to show much more leadership and to take greater risks.
“There is no question at all that all of what we required, all of what is needed will not be provided just by government.
“As a matter of fact, it is very clear that governments cannot finance the huge infrastructure needs of most countries.
“As a matter of fact, without the private sector, it is completely impossible for government to even finance current infrastructure needs.’’
According to Osinbajo, all the country’s refineries at the moment do not refine 600,000 barrels of oil, adding that one single private investor is building the largest single line refinery, 650,000 barrels of oil.
“There is no question at all that government cannot simply compare with the power of the private sector and with the resources that the private sector can pull together.
It is the AFCs that can bring the private sector de-risk government to a certain extent and bring the private sector and the public sector to deliver on the kind of infrastructure needs that our country requires.
Osinbajo also said it was obvious that markets would determine practically everything.
He noted that no form of central planning by government could achieve much, adding that while government would interfere, it should ensure that markets determined all things.
He ascribed the mobile technology boom in the country to the markets.
He added that the fact that governments allowed the private sector to take the lead and created the regulatory environment made it possible, noting that no fewer than 750 million Africans had access to phones.
“For many, their first use of the phone was the mobile phone; and that is the power of markets where regulation of the public sector comes together with the private sector.
“This is the role the DFIs should play, that mediatory role, that convening role is what the DFIs will be doing in the next few years,’’ he said.
He commended the AFC for the excellent work it had done in the past 10 years and urged it to continue to fill the gap.
Osinbajo described the AFC story as one of the core of African professionals whose courage and faith in leaving the safety and certainty of institutions where they had established firm reputations for themselves for the start-up of the multi-lateral DFI.
He said that had defined the corporation with an ethos which had built such trust and confidence that had initiated, led, participated in and offered project finance and management services to many infrastructure projects in Africa.
Later, during the dialogue session, Osinbajo said that the administration had identified a number of priorities such as power, transportation and railways, adding that over time problems arose in the value chain of power in spite of private sector involvement.
He said the nation’s installed capacity in power was good but noted that customers were unwilling to pay cost-effective tariffs.
He said that to support investments in the sector, government earmarked N700 million into an insurance programme to ensure that gas producers remained in business.
He added that government was ready to invest in new technologies to facilitate power distribution.
Osinbajo expressed optimism that the infrastructure challenges in Africa could be bridged by its people, especially the active youth population engaged in innovations and creativity.
He said Africa was certainly the next destination for development in the world.
“This coming decade is Africa’s decade; it is Africa’s time, so I think it is an exciting time to be an African; an exciting time to be leaders in the economy or business or in politics,’’ he added.