FOR Nigeria to meet up with over N1.5 trillion projected aviation infrastructure deficit annually, Chief Executive Officer (CEO) Quorum Aviation, Mr. Abiola Lawal has canvassed Public Private Partnership (PPP) arrangement stressing that opportunities for the private sector is huge but must be done under the right conditions.
Lawal made this known virtually while participating at the Aviation Safety Round Table Initiative (ART) Q3 Breakfast Business meeting themed: Funding Aviation Infrastructure Deficit in Nigeria Using Private Capital: Challenges and Prospects where he recommended improved access to capital at low single digit rates to help investment boost investment.
He also stated that Return on Investment (ROI) with regards private sector funding infrastructure was low but the attending risks of such investments were high.
Lawal canvassed 2.5% single digit debt for a long term tenure of between 10 to 20 years as opposed to what currently entails which is a high cost of capital with interest rates going at 20% Avg with banks and at very short tenures, according to him, too short for infrastructure funding which ought to be long term.
He also decried that while Nigeria was celebrating the 9% interest rate on the intervention funds, that it was quite a high single digit as other countries were given at almost 0% interest rate
Apart from the economic and financial challenges,the Quorum boss identified legal frameworks as well as politics and policies as major challenges that negate the conditions for investment stressing that once the micro tenets of these challenges are resolves, the nation can start bridging the aviation infrastructure gap.
Lawal said inconsistent legal framework, inability to enforce contractual agreements as well as extremely long cycles to put contracts together was an issue explaining that as part of the Asaba Airport Concession Consortium,it took about five (5) years for government to put the concession together.
He stressed that there must be infrastructure law as PPP to protect investors and these must be enforceable and not dragged in court for years.
He further talked about the challenge of government and continuity of policy as well as transparency in the process of any investment in the sector, stressing that there should be consistency in government policies over long periods of time.
