Closing Nigeria's Infrastructure Gap

Proshare

Wednesday, August 11, 2021 / 09:10 AM / by United Capital Research / Header Image Credit: Africa on the Rise


Nigeria's infrastructure gap remains a critical bottleneck that continues to undermine the country's economic potentials. Thus, different suggestions have been put forward as measures to spur improvement in the decrepit state of infrastructure. While major bodies like the International Monetary Fund (IMF) and African Development Bank (AfDB) have estimated that the infrastructure gap would require c.$3.0tn to close, the Secretary-General of the Federation, Boss Mustapha has stated the Federal government is looking to spend $2.3tn over 23 years (2020 - 2043) to close the gap. This is according to the National Integrated Infrastructure Master Plan (NIIMP), a 23-year master plan originally developed in 2012  and reviewed in 2020. 

The NIIMP paper is expected to see significant investment in major sectors of the economy, considering the widespread nature of the infrastructure gap across sectors. For example, the energy sector will gulp the most, with $759.0bn expected to be spent while the transport sector will see $575.0bn spent to revamp the infrastructure network. That said, we note the project is as usual very ambitious but we remain concerned about the funding source for these projects. Possible sources of finance have been identified, including: government budget, government borrowing, the Sovereign Wealth Fund, & Pension Funds and private sector partnerships.

Looking ahead, we believe any meaningful improvement in the state of infrastructure will require significant private sector participation as the federal government remains clearly unable to fund these capital projects. This would enable access to increased funding and improved maintenance culture considering these projects would be revenue-generating (to help investors recoup investments). Also, the successful launch and operation of Infraco (Nigeria's infrastructure company), will play a critical role. That said, resolving the infrastructure challenge would significantly help to improve prospects of achieving the economy's potentials.   


Proshare Nigeria Pvt. Ltd.


Related News

  1. Not All Infrastructure Projects Are Worth Doing, Research Paper Finds
  2. N15tr InfraCo Begins Full Operations in Q3 2021
  3. Financing Nigeria Infrastructure Deficit: Would Infra-Co Do?
  4. USTDA, InfraCredit Partner to Develop Quality Infrastructure in Nigeria
  5. AfCFTA: Revamping Nigeria's Infrastructure for Global Trade
  6. Infrastructure Deficit as a Constraint to Economic Development
  7. CBN Calls for EOIs for Appointment as an Independent Infrastructure Asset Manager for The InfraCorp
  8. Nigeria to Appoint Fund Manager for US$37bn Infrastructure Fund
  9. Nigeria Infrastructure Splurge to Boost Economy
  10. FG Looks to Public-Private Partnerships in Tackling Infrastructure Deficit
  11. President Buhari Approves Formation of N1 Trillion Naira Company to Address Infrastructure Deficit
  12. 2021 Budget to Focus on Security, Human Capital Development and Infrastructure - Zainab Ahmed
  13. InfraCredit's Guarantee Supports TSL's Issuance of a N12bn 10-Year Series 1 Infrastructure Bonds
  14. Infrastructure Development in Nigeria: The PPP Approach
  15. President Buhari Approves the Establishment of an Infrastructure Company
Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP