Identifying Appropriate Funding Model for Public Infrastructures in Nigeria: A Non-Empirical Analysis

Abstract

The state of public infrastructures in Nigeria has been described by many scholars as very deplorable. The study which focused on the Nigerian economy aimed to examine the public infrastructures funding models in Nigeria, their effectiveness and suggest an alternative model to maximize public infrastructure development. The opportunities offered by the PPPs, bond and equity markets to fund infrastructural projects are massive in terms of limitless funds, expertise and timely completion of projects. A hybrid funding model that makes a right combination of PPPs, debts and equity could be less expensive than when the public infrastructures are funded wholly from PPP or debts. The government’s aim of funding any particular public infrastructures could be for some socio-economic reasons with direct or indirect impacts on economic development, job creation, ease of doing business, security, welfare, standard of living and government popularity but the aim of the private sector whether the funding comes in the form of PPP, debts (bonds) or equity is wealth maximization. The government is advised to seek more funding opportunities outside its internally generated revenue and federal allocation sources but this should be done with caution to strike a positive and favourable balance between its socio-economic aims and the wealth maximization objective of the private sector who intend to fund the public infrastructures.

Keywords: Economic growth and development, capital market, funding models, government, bond,  PPP, poverty,  Public infrastructure, security

JEL Classification: H54, I30, J68, L33