Nigeria’s PPP Reset: ICRC Tightens Safeguards Around Deals

The Infrastructure Concession and Regulatory Commission (ICRC) of Nigeria is enhancing safeguards for public-private partnership (PPP) projects. The move comes after several controversial infrastructure deals and aims to prevent a repeat of past failures. Dr. Jobson Ewalefoh, the Director-General of ICRC, outlined recent reforms during a recent briefing. These reforms include standard concession agreements, mandatory contract reviews and stronger compliance monitoring.

Ewalefoh explained that past failures in PPP projects stemmed from poorly structured agreements, inadequate risk allocation and insufficient provisions for unforeseen developments. He emphasized that PPPs are complex transactions, and the challenge lies in anticipating difficulties and providing mechanisms for resolution.

In response, the ICRC is developing a model concession agreement to address inconsistencies in current contracts and ensure consistent risk allocation and management. This model agreement aims to improve contract quality, clarify risk distribution and expedite ICRC review processes.

Furthermore, the ICRC has restricted the use of memoranda of understanding (MoUs) for investment proposals without proper contractual commitments. MoUs will no longer serve as substitutes for full concession agreements, ensuring projects progress through a more rigorous contractual process.

Despite challenges like currency volatility and political uncertainty, Nigeria continues to attract infrastructure investment proposals due to its significant infrastructure needs and potential returns. However, policy certainty remains crucial for investors, and recent foreign-exchange reforms have addressed some concerns.