Kadri Obafemi Hamzat

Lagos State Honourable Commissioner for

Works and Infrastructure


Paper for the Nigeria Infrastructure Building
Conference


How can social
infrastructure projects
benefit from the PPP
approach?

June 26
th
2014


Your excellencies, distinguished guests
PROTOCOLS.
It is my pleasure to be here today to provide a
perspective on the use of Public Private Partnerships
for social infrastructure. As the Lagos State
Commissioner for Works and Infrastructure this is a
topic that I and my team consider each and every day.
It is our job to ensure that the services our citizens
receive from their government meet their needs.
Let me start by providing an insight into the
infrastructure challenge across Africa, before focusing
in on Lagos State and how we have approached
infrastructure provision and the use of Public Private
Partnerships. I will then share a vision for how we
might broaden its use to address the needs of our fast
growing population and existing infrastructure deficit.
Infrastructure and social development
Big infrastructure projects are by their nature, social
investments, especially in developing markets, where
the provision of basic services is often lagging far
behind the needs of fast growing populations. The
provision of power, water and transportation
infrastructure are often taken for granted in the
developed world, but serve an undeniable social
purpose in Africa. The electricity that we deliver to
rural villages can be the difference between a school
students ability to do his homework or not. The water
we supply dramatically affects the health of those given
access to it and the roads, bridges and railways we
construct make it easier for people to get to and from
work. The jobs that are created by infrastructure
projects themselves deliver a social return and we are
proud that in Lagos about 423,000 jobs have been
created on infrastructure projects over the last 3 years.
These are the considerations that we take into account
when examining each and every one of the projects we
embarked on.
Infrastructure in Africa and PPP
Lagos is not alone in Africa in having to address a vast
infrastructure challenge. The World Bank estimates is
that Africa faces infrastructure investment deficit
annually of US$93 billion for at least a decade. That is
far beyond the capacity of African governments to
address alone. Alternative sources of finance must be
found, wherever we are on the continent and so, while
providing a social good, infrastructure projects are
increasingly required to also deliver a commercial
return to those willing to invest in it as an asset class.
One of the most impressive achievements in the
infrastructure space over the last decade has been the
ability to deliver on projects that attract international
investment. De-risking infrastructure investment in
Africa, while delivering a strong commercial return
means that going forwards, we should be able to
attract more and more of the investment we need to
bridge the gap.
Lagos and PPP
In 1999, following the return to democracy and the
election of Asiwaju Bola Tinubu as the Governor of
Lagos State, the revenue of the state was certainly not
enough to deal with challenges facing the state. Our
revenue generating ability was limited and the needs of
our citizens immense. It was clear that unless a
financial reengineering took place we would neither
have the resources, nor the capacity to deliver on what
it takes to build the city. I have been lucky enough to
serve in both the administrations of the Asiwaju, and
his successor the current Executive Governor of Lagos
State, Babatunde Raji Fashola and I am proud to have
been involved in delivering such a revolution. From
less than 700,000 registered tax payers when APC
took office we now have over 4.2 million. From a state
budget of N69 billion per annum we now have a
budget of 497 billion Naira per annum. INSERT
ADDITIONAL ACHIEVEMENTS
But as we have grown the state budget, so the
challenges facing the government have also increased.
From a population of 5.9 million in 1999, we now have
over 21 million people and our population is believed
to be growing at over 6% per annum, thats ten times
faster than New York or Los Angeles. Despite our
ability to dramatically increase the states revenue
generating capacity, our physical infrastructure
requirements continue to place significant demands on
our balance sheet. We have to be able to invest faster
than the state budget allows us to if we are to expedite
the delivery of services to the masses. That is why
Public Private Partnerships are so important and why
we will continue to use them to find new and
innovative ways to deliver the services our citizens
need and deserve.
For us, the concept of PPP goes beyond the simple
structure of partnerships between the public and
private sectors to reflect the lens through which we
assess their potential impact.
The first P is for People. All the projects we consider
must fulfill the people of Lagoss needs expeditiously,
efficiently and economically. If they do not improve
public service delivery, they are not considered.
The second P is for Possibilities. Removing the need
for the government to use only its own funds we are
able to consider a far greater wealth of possible
projects and initiatives than we could without.
The third P is for performance. For every project, we
must set cl ear benchmarks, mi l estones and
deliverables to audit the performance of the project
against the promise. If they do not deliver tangible
benefits, they must be held to account.
Using PPP for social infrastructure?
Classically, the concept of PPP in social infrastructure
is about leveraging the capacity and skill of the private
sector to enhance the delivery of social services, like
education, health, shelter and security. All of which are
equally important to the future development and
prosperity of Lagos and its people. Many people often
misinterpret this as the need to build physical assets,
like hospitals and schools. The reality is that it can be
much simpler than that. Let me give you a few
examples:
- As the commercial centre of Nigeria Lagos is home
to some of the worlds largest companies as well as
our own emerging indigenous private sector with a
rapidly growing need for skilled labour. Every
private sector leader I meet with is crying out for
improvements in the relevance and skill sets of our
graduates. We need to revamp and restructure our
education curricula with a view to ensuring
students acquire the right skills for employment,
entrepreneurship and innovation, and we need to
provide greater access to technical and vocational
training. By doing so with a forward looking
understanding of the needs of the private sector (a
partnership) we can drastically improve the skills of
our young people, and so their ability to secure
sustainable employment, but also support even
faster economic growth. A better educated
workforce will only increase our ability to attract
investment. As such, we partnered with Samsung to
build an academy that teaches electronics at a
practical level
- INSERT ADDITIONAL EXAMPLES

Our vision for Lagos is to create a Mega City of the

future. To do that we have to make decisions that show
we have a Mega Heart. The social impact of the
projects we initiate is the only true rationale for
delivering them.
God bless, Lagos and God bless Nigeria.
Eko oni baje o