Nigeria’s spending on special projects targeted at stimulating economic growth is projected to rise to N7.7 trillion by 2025.
This is about 68.1 percent from N4.58 trillion in 2021. The funding programme will be by sovereign guarantees under a Public-Private Partnership (PPP).
The cost is tied to funding projects, including the Federal Capital Development Authority’s Katampe Infrastructure Project, Nigeria Ports Authority’s Lekki Deep Seaport, Nigerian Export-Import (NEXIM) Bank export drive, Payment Assurance Facility for Nigeria Bulk Electricity Trading Plc, Power Sector Contingent Liabilities Put-Call Option Agreement (PCOA), Power Sector Contingent Liabilities – Partial Risk Guarantees (PRG) and Legacy FGN Exposure from PHCN Successor Companies as well as NNPC – Ajaokuta–Kaduna–Kano, AKK Project.
The Budget Office of the Federation, which disclosed this in its Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP) for the 2023- 2025, stated: “Given the fiscal constraint faced by the Government and the need to address the infrastructure deficit in the country to engender economic growth and development, the Federal Government of Nigeria (FGN) will continue to use Sovereign Guarantees subject to receipt of required approvals and other forms of off-balance sheet products to support the private sector operators involved in infrastructure development, under the Public-Private Partnership (PPP) arrangements. These Sovereign Guarantees will constitute explicit Contingent Liabilities.
“The Sovereign Guarantees will be monitored and managed to ensure that the inherent risks from these projects are mitigated and the Guarantees do not crystalize.”
As at December 31, 2021, the Contingent Liabilities of Government rose to N4.58 trillion, representing an increase from the N4.18 trillion recorded in 2020.