Barriers to bond financing for public-private partnership infrastructure projects in emerging markets : a case of Nigeria

Purpose: The purpose of this study is to identify and critically assess the barriers to bond financing for public–private partnership (PPP) infrastructure projects in Nigeria using an empirical quantitative analysis. Innovative ways to finance long-term infrastructure projects had been documented. However, there is a dearth of empirical studies on the barriers to bond financing for PPP infrastructure projects. Design/methodology/approach: A comprehensive literature review was conducted to identify the barriers to bond financing for infrastructure projects, which were employed to design a questionnaire. A questionnaire survey was carried out which targeted financial experts in the Nigerian financial institutions/local banks. Data collected were analysed using descriptive and inferential statistics to include mean score, chi-square (χ2) test and factor analysis (principal component analysis). Findings: The analysis of the ranking in terms of the mean score values for the 12 identified barriers indicated that all the identified barriers are considered by respondents as critical barriers to bond financing for PPP infrastructure projects in Nigeria. The study, through factor analysis, grouped the 12 identified barriers into 5 principal factors. These include governance and institutional capacity issues, higher issuance cost and risk, difficulties in getting approval for changes, the small size of bond markets and stringent disclosure requirements. Practical implications: This research is significant by providing the empirical evidence of the barriers to bond financing for PPP infrastructure in emerging markets, especially in Nigeria. Originality/value: The findings would enable the policymakers to draw some policy recommendations that will positively influence the development of bond markets in Nigeria and emerging markets at large. These study findings are crucial, as not many empirical studies have been conducted in Nigeria.