By Remi Babalola
The theme of the workshop, \"Financial Institutions and the Challenges of Infrastructure Financing\" is not only apt but timely in view of the present Administration\'s determination to build a vibrant and sustainable economy through the 7-point Agenda with focus on critical sectors especially infrastructure.
We recognise that limited access to quality infrastructure is a key constraint to the growth of the Nigerian economy. We also recognise that infrastructure and its related services are critical to the operation and efficiency of a modern economy. In addition, they constitute essential input in the provision of goods and services and significantly affect the productivity, cost, and competitiveness of any economy. Indeed, the adequacy of infrastructure helps to determine one country\'s success and another\'s failure in diversifying production, expanding trade, coping with population growth, reducing poverty, as well as improving environmental conditions. Consequently, policy decisions regarding infrastructure provision and deployment impact national growth and development.
Traditionally, infrastructure financing has been viewed as a natural monopoly under the management, control, and financial responsibility of governments - in recognition of the potential economies of scale, public nature of the service, and capital intensity of providing water, electricity, telecommunications, and transportation services., However, with economic decline, governments have been unable to keep up with adequate level of services and rapidly increasing new investment requirements. Characterised by lacking transparency, inefficiency of service: delivery, and financial insolvency, as well as the growing need for expansion, providing the basic infrastructure services has become a major constraint to economic revival. To confront the escalating costs of infrastructure development, most governments across the world (including
No doubt, infrastructure is capital intensive and the public sector alone can no longer provide them. Therefore, the government is intensifying efforts to attract and partner with the private sector in infrastructure development, through Public Private Partnerships (PPP). This is why this Administration has constituted the Infrastructure Concession Regulatory Commission (ICRC) under the chairmanship of Chief Ernest Shonekon to spearhead this initiative. Government recognises the need to ensure a level playing field, encourage private sector participation and attract capital to fund infrastructure and related services. PPP would supplement scarce public resources, create more competitive environment and help improve efficiencies and reduce costs. Indeed, public sector financing must be complemented by private sector financing in service delivery. Public and private financial models rely on the success of one another to achieve public purposes. In the PPP framework, public and private sectors should complement each other in the overall development effort.
The role of adequate physical and social infrastructure in achievement of our national aspiration cannot be over emphasised. In addition to ensuring adequate educational infrastructure, the present Administration is devoting policy attention and other required resources to ensure that our energy, transportation and communication infrastructure are adequately and efficiently provided to support our economic competitiveness and growth objectives. This is a special area where practical expression has been given to the framework of public-private partnership, and I am delighted to inform you that mechanisms have been put in place to mobilise non-government resources towards the upgrading, maintenance and expansion of our infrastructure network in the country.
I note with interest the rich programme of activities designed for this workshop and I cannot agree less that the issues lined up for discussion are critical for our match towards 2020. I, therefore, expect that the outcome of this workshop will greatly enrich government policy and place us in a better position to attain the much needed economic growth and transformation, especially in the area of infrastructure, at a faster pace. Be assured that my ministry will continuously pursue fiscal prudence and enthronement of sound fiscal policies towards realising the goals of the Seven-point Agenda and Vision 2020, of which infrastructure development is a key component. - Independent
Babalola, Minister of State for Finance, delivered this address at a workshop organised by the Finance Correspondents Association of Nigeria (FICAN).