As the Central Bank of Nigeria (CBN) and the Nigerian Sovereign Wealth Investment Authority (NSIA) conclude plans to launch the N15 trillion infrastructure fund this October, stakeholders have called on the government to concentrate on addressing critical sectors of the economy with the funds.
The experts, which cut across key sectors of the Nigerian economy also insisted that a N15 trillion infrastructure fund designed by the CBN could be the most sustainable approach to bridging infrastructure deficit in the country.
President Muhammadu Buhari had at 26th Nigerian Economic Summit Group (NESG) conference in January, announced plans to float a N15 trillion infrastructure fund.
The InfraCo Fund designed and set up by the CBN, NSIA and state governments under the auspices of the National Economic Council (NEC) is expected to be managed independently.
Last month, the CBN governor, Mr. Godwin Emefiele had disclosed that the apex bank, African Finance Corporation and the NSIA would debut an InfraCorp Plc, providing a fund of N15 trillion to address the lingering deficits in infrastructure.
According to the federal government’s Economic Recovery and Growth Plan, Nigeria needs $30 trillion in the next 30 years to develop the nation’s infrastructure to the level that is required to serve the country.
Emefiele had said the N15 trillion fund, coming as InfraCorp Plc and expected to be launched this October would enable the use of “mostly private capital to support infrastructure investment that will have a multiplier effect on growth across critical sectors.
With inflation hovering around 17.33 per cent as unemployment stands at over 33.3 per cent while rising debt poses grave dangers, but with improvement in infrastructure, the country may improve productivity and thereby improve quality of life. The development could in turn address growing poverty in the country.
An expert at PWC, Habeeb Jaiyeola, noted that while Infrastructure funds are used across the world for the development of critical infrastructure, which guarantee constant returns on investment for investors, a critical element of the success of the funds remained adequate planning and strategic contracting.
“It is expected that the N15 trillion fund is channelled into critical infrastructure in the country that will open up sectors and markets as infrastructure challenges have been one of the major factors hindering the growth of some critical sectors in Nigeria,” Jaiyeola said.
He noted that with several infrastructure initiatives already being conceptualised within various sectors, especially the gas infrastructure fund embedded within the newly signed PIA, the host community development fund also within the PIA, the N15 trillion infrastructure fund should be administered to complement and align with the plans and projects.
A senior lecturer at Ahmadu Bello University, Zaria, Prof. Muhammed Usman, had insisted that investment in infrastructure in the country is below par.
sman had said: “Infrastructural development plays a pivotal role in enhancing economic growth, improving living standards, reducing poverty, and contributing to environmental sustainability.”
Although stakeholders stressed the need for massive investment in infrastructure, noting that the efforts but the CBN remained laudable, they insisted that there was need for proper and sustainable plans that would lead to projected goals.
A professor of Economics at Babcock University and former president, Chartered Institute of Bankers of Nigeria (CIBN), Segun Ajibola, noted that several hundreds of thousands of road networks, rail lines, energy and power, water and others remained critical but sadly inadequate or dilapidated.
According to him, the deficits constrain the nation’s economy despite the growth in population, urbanisation and technological advancement, adding that the need for the provision of these essential infrastructures remains inevitable yet daunting.
“Hitherto, some reliance had been placed on other sovereigns such as China, international financial institutions such as the World Bank, ADB, etc. But there is a limit to what Nigeria can attract from these countries and institutions because of the not too friendly conditionalities usually imposed on developing countries like Nigeria.
“Looking inwards in the manner being proposed by the CBN may be helpful. But then, the framework must be right. I will recommend a private partnering via collaborative arrangement between local and foreign interests adjudged competent in providing such infrastructures,” Ajibola noted.
He noted that PPP would improve on the quality of delivery, performance and accountability, noting that such interventions were expected to berth with relatively generous terms and business-like templates.
Ajibola urged the apex bank to introduce a framework for monitoring performance, which must be efficient and effective, adding that there must be a shift from seeing intervention funds as free public funds, adding that such mentality must be tackled head long if the infrastructural fund would achieve the desired goals.
Former President, Nigerian American Chamber of Commerce and chairman of Tricontinental Group, Olabintan Famutimi noted that while the infrastructure deficits in the country remained worrisome and require intervention like the CBN funding, the country must tread wisely.
Famutimi was concerned about channeling funds into viable projects with economic benefits instead of politicizing economic and business decisions.
“We have a huge infrastructure deficit. We need infrastructure but it is more about which infrastructure the government is working on, funding source and the conditions of the fund as well as the overall effect on the economy,” he said.
Famutimi insisted that raising funds to finance infrastructure is not enough but critical examination of the economic outlook of the projects and the multiplier effects on the nation remained sacrosanct.