By Nkechi Isaac, Abuja
Good as it seems, most countries still suffer huge infrastructural deficits, seeing through paucity of funds and capacity; experienced and qualified professionals to reduce the shortfall identified in projects and service delivery.
Nigeria’s dismal profile in basic infrastructure and the need for cross sector partnership alternatives to bridge the gap cannot be overemphasized.
A World Bank and Private Infrastructure Advisory Facility data has indeed underscored the importance of the private sector in growing the economy of developing countries steadily from 1997. That was when many governments turned to the Public Private Partnership, PPP, model for designing, building, financing and operating new and existing public facilities for service improvement and project delivery.
Speaking at the 10th Africa Finance Corporation Summit, aimed at charting a way for infrastructure financing in Africa, the Minister of Finance, Mrs Kemi Adeosun, said the Federal Government would make the public private partnerships work in spite of its challenges, to bridge the wide infrastructure deficit in the country.
Nigeria’s infrastructure deficit is put at 300 billion dollars, representing 25 percent of the nation’s Gross Domestic Product.
Addressing journalists on the just passed 2017 national budget for the country, the director-general of the Abuja Chamber of Commerce and Industry (ACCI), Mr Chijioke Ekechukwu, lauded government’s commitment in the areas of growing infrastructural deficit.
He said: “We have seen the budget, of course. It is a budget meant to bring us out of the recession we found ourselves. We could see cohesion between the budget and the medium time fiscal framework we have and Nigeria’s economic recovery growth plan that we already have. There is cohesion because you could see where the government of today has focused its efforts. We also saw that in the areas of infrastructure, areas of growing infrastructural deficit that we actually had before and of course in power and in road construction.”
Going through the details of the budget, according to him, the government plans to spend a lot in the transport sector especially on railways in the country. He said if government had adopted the zero based budgeting promised Nigerians, it would have helped in cutting down some unnecessary expenses in the 2017 budget.
“I have a little concern because we expected to have a zero-based budgeting that we were promised. But again, we saw that it was an incremental budget that we had. A zero-based budget was supposed to treat the budget as if we are just starting, using this year as a base year and then taking it up from there. But we also saw that the budget so presented was just an incremental budget where the various ministries and parastatals added a particular percentage to the old budget that they had and that is why we keep having an increased volume in the budget figure.
“If we say we want a zero-based budget, we should make it a zero-based budget. A zero-based budget should help us to actually curtail some of the excesses. For example we don’t need to budget some certain things if we really do not need them. What we really have in practical terms is implemental budget and not a zero budget that is what we observed.
“From what we have seen, whether it is zero-based budget or implemental budget, if every other thing remains constant; if our oil production capacity of 2.2 million barrels per day remains so; if the insurgency remains as quiet as it is today; if the oil price does not drop like it did before, we are going to come out of recession with the budget we have seen,” he further stated.
The director-general however admitted that whether zero or incremental budget, the 2017 budget could take Nigeria out of recession if the current level of insurgency and oil production remain quiet and at its current output figure respectively. He explained that with focus on massive road construction which is included in the budget, money would circulate among the populace and the economy would improve substantially.
While commending government for its different efforts at encouraging small and medium scale enterprises, he reminded that no SME would survive without stable electricity, and with multiplicity of taxes.
He urged the government to work on the cost of funding for SMEs and ensure that interest rates from commercial banks are reduced to single digits.
“Our concern as a chamber of commerce is that if we don’t have steady electricity supply, no entrepreneur can succeed in its business. The second area of problem is the cost of funds provided by the banks. The interest is very high for entrepreneurs. That increases the cost of doing business and many of them are not able to survive.
“The most difficult aspect for SMEs is multiplicity of taxes. When a new business is starting, there should be tax incentives and tax holidays. But what we see today is that once a new business starts, all the taxes will be charged from FIRS, state and local governments. We know about some businesses that started in this Abuja that had to close because there were too many taxes for them to pay and they couldn’t cope.
“We expect harmonization of these taxes. We are not saying government should not charge taxes because that is a major part of our revenue, but where the federal, state and local government charges and the taxes are not harmonized, it is a major discouraging factor. This is a major setback otherwise, with the effort government is making we should gradually get out of recession”, Ekechukwu added.