SIGNAL
In West African infrastructure, the Public-Private Partnership was once positioned as the primary answer to the region’s $100 billion annual infrastructure gap. The record of recent mega-highway projects, including the Lekki Concession in Nigeria and stalled ECOWAS-region corridors, reveals a more complex picture. When the Build-Operate-Transfer model is poorly structured, it can shift from investment vehicle to liability. These concession failures offer a practical guide to the risks of currency mismatch and political exposure.
WHAT CHANGED
The primary driver of recent PPP failures is the disconnect between macro-economic assumptions and project realities. Fuel price inflation and the significant devaluation of local currencies against the USD have rendered many toll-road revenue models unworkable. When a project’s debt is denominated in dollars but its revenue (tolls) is collected in local currency, a 30 percent currency slide can eliminate the equity IRR entirely.
BUSINESS IMPACT
The failure of a mega-PPP is not just a project loss. It is a reputational and systemic event. Failed concessions produce stranded assets where the private sector cannot exit and the public sector cannot manage. In the case of the Lekki-Epe Expressway, the government was ultimately forced into a N15 billion buyback to prevent financial collapse, effectively moving the debt back onto the public ledger.
THE THRESHOLD PERSPECTIVE
The era of easy infrastructure concessions is over. The next generation of projects must move away from pure dollar-denominated debt toward blended finance models that leverage local institutional capital. True value will be found in corridors that prioritize trade efficiency over simple transit, with regulatory frameworks insulated from four-year election cycles.