Nigeria: $85bn Infrastructure Investment Needed for Double-digit Growth, Central Bank Chief Emefiele Says

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, declared that N35 trillion (about $85bn) investment in infrastructure is required for the economy to post a double-digit growth.

But, he declared that given the paucity of government revenues, it will be difficult to support such investments using government funds alone.

The Nigerian economy recorded a 0.51 per cent growth in the first quarter of 2021 after a 0.11 per cent growth in the fourth quarter of 2020.

In a goodwill message he delivered at a
webinar on “Financing Public-Private Partnership to Boost Infrastructure Delivery in Nigeria,” organised by the Bureau of Public Enterprises (BPE) in Abuja, Thursday Emefiele noted that
the theme of the webinar was topical as a critical part of efforts to drive sustainable growth of the Nigerian economy.

The CBN Governor whose message was delivered by the Deputy Governor of the bank on Economic Policy, Dr. Kingsley Obiora, said the COVID-19 pandemic had exerted unprecedented impact on the Nigerian economy, adding that significant interventions by the monetary and fiscal authorities had led to exit from two recessions although growth is muted.

He observed: “While this news is positive, growth is still well below our population growth of 2.7 per cent. It is therefore imperative that we all work together to harness the growth potential of the Nigerian economy.

“If we take into account Nigeria’s Infrastructure Masterplan, we require close to N35 trillion worth of investment in order to attain double-digit growth. But given the paucity of government revenue, which the BPE Director General mentioned earlier, it will be difficult to support these investments using government funds alone.

“So, finding ways to harness public-private partnerships have become very important and we are happy to acknowledge that these partnerships have started in earnest and the Central Bank of Nigeria looks forward to continuing collaboration with the BPE to harness these partnerships to ensure that we significantly scale up investment in our infrastructure.”

In her keynote address, the Minister of Finance, Budget and National Planning, Dr. Zainab Shamsuna Ahmed disclosed that from the 2021/2022 budget cycle, all infrastructure projects in Nigeria must be screened for Public Private Partnership (PPP) suitability and compliance with the National Integrated Infrastructure Master plan by her ministry and the BPE before inclusion in national budgets and subsequent procurement.

The Minister who is also the Vice-Chairman of the National Council on Privatisation (NCP) said “all these efforts are to ensure that PPP takes a center stage in the procurement of infrastructure in the Nigeria.”

The government, she said, is ready and willing to dialogue and incorporate valuable suggestions from stakeholders with a view to further strengthening Nigeria’s PPP framework.

She noted that the webinar was an opportunity to hear directly on the concerns and areas the participants would like the government to address to make investment beneficial and deliver value for money to the country at large.

While soliciting the support and cooperation of the public and private sectors partners, local and foreign partners, financial institutions and other important key stakeholders towards the successful implementation of the government’s new PPP policy directive, she said the present administration was committed to the development of the country’s infrastructure through PPP arrangements.

In his remarks, the BPE Director General, Mr. Alex Okoh said in line with its new role in the administration of concession programmes of the Federal Government of Nigeria, the Bureau in collaboration with the Federal Ministry of Finance, Budget & National Planning, has developed a PPP project information tool which has been forwarded to all the ministries, departments and agpencies (MDAs) to capture all current and proposed infrastructure projects in the country.

“This will help document a pipeline of PPP projects across various sectors of the economy” and that a number of the MDAs have already submitted their PPP Project Information Data and that the final date for submission is May 31, 2021,” Okoh disclosed.

According to him, the Bureau would partner with the United Kingdom Nigeria Infrastructure Advisory Facility (UKNIAF) to screen projects to ensure that only those that are financially as well as economically viable are included in the ‘National Pipeline of PPP Projects’.

He stated that the BPE also intends to establish a revolving Project Development Fund (PDF) for PPP transactions, adding that funds realised from the pool would be used to facilitate the proper structuring of PPP transactions.

Expressing the hope that financial institutions would support the initiative to increase the number of viable projects that could be successfully brought to commercial and financial close in the infrastructure space through PPPs, Okoh observed that considering the huge gap in infrastructure stock in the country and the quantum of funding required to bridge the gap, the role of private sector financing through PPPs has assumed a very significant importance, hence the need to host the webinar.

Ndubuisi Francis in Abuja

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