Fashola tasks banks on PPP projects financing, monitoring

Fashola tasks banks on PPP projects
financing, monitoring
on november 14, 2013 at 12:47 am in business
By NKIRUKA NNOROM
LAGOS State governor, Raji Babatunde Fashola has
called on banks to be actively involved not just in
financing Public Private Partnership projects, but in
ensuring that the projects they commit depositors’
fund to are properly executed.
Fashola made the call at the Bank Directors
Association of Nigeria (BDAN) stakeholders’ forum
in Lagos. Speaking through his Commissioner for
Finance, Mr. Ayodele Gbeleyi, the governor said the
task of monitoring PPP projects should not be left to
government (public sector) alone. According to him,
the concept of public private sector partnership in
project development is still evolving in Nigeria and
as such, all key stakeholders must evolve with it.
“Bankers do not rise to the occasion in terms of
monitoring of these projects. Monitor projects that
are financed with depositors’ money. This market is
evolving and we need to evolve with it. We need to
see better understanding of PPP projects and better
structuring of proposals. As banks, we need to
manage risk optimally; we need to build capacity for
long term funding. There should be continuous
market infrastructure that will rise up and support
PPP projects,” he stated.
Fashola added that assess to long term finance
relative to the life span of any project is a key
factor to any successful PPP initiative. He listed
other key success factors to include enabling policy
and institutional framework for investment
purposes; the need to establish a working
relationship towards the joint fulfillment of the
general public’s infrastructure needs, as well as
need to communicate government expectation
regarding responsible business conducts to private
partners among others.
The governor emphasised the need for both the
public and private sector to familiarise themselves
with the PPP concept and international best
practices, assuring that Lagos State is committed to
improving the general level of awareness and
understanding of PPP among all stakeholders in
order to facilitate sound policy development and
constructive discussion and debate.  “Rather than
being the sole driver of the public enterprises, we
are of the view that government should be an
enabler, facilitator and regulator, focusing on co-
ownership and co-responsibility, while the private
sector drives the economy.”
In her welcome address, Vice-President of BDAN,
Mrs Foluke Abdulrazaq, said up to date, Nigerian
banks have a cumulative balance sheet of over N7
trillion invested in the economy.
She noted that it is expected that a fair share of
future funding requirements would come in the form
of PPP proposals from both government and
financial institutions. According to her, “Nigerian
banks are already assessing proposals from private
sector operators who are exploring funding options
from local and international financial institutions.”
Explaining the role of BDAN, she said that the
association provides a forum for improving the
knowledge and competence of bank directors,
thereby promoting honourable practice within the
banking sector.