CBN, NSIA, AFC to Float N15tn Infrastructure Fund for Nigeria

As part of the new environment being created for the implementation of public-private partnership (PPP) projects, the federal government through the Central Bank of Nigeria (CBN), Nigerian Sovereign Investment Authority (NSIA) and African Finance Corporation and other financial institutions is to float a N15 trillion infrastructure fund.

As part of the new environment being created for the implementation of public-private partnership (PPP) projects, the federal government through the Central Bank of Nigeria (CBN), Nigerian Sovereign Investment Authority (NSIA) and African Finance Corporation and other financial institutions is to float a N15 trillion infrastructure fund.

The Vice President, Prof Yemi Osinbajo, who disclosed this at a webinar, recently on Deepening the Nigerian infrastructure stock through Public-Private Partnership (PPP), said: “As part of the new environment being created for the implementation of PPP projects, the federal government through the CBN, Nigerian Sovereign Investment Authority and African Finance Corporation and other financial institutions will be creating a N15 trillion Infrastructure Fund that will help to, not only unlock investment from local sources but also attract foreign private investment in infrastructure development.”


This, he said, would help to, not only unlock investment from local sources but also attract foreign private investment in infrastructure development.

Speaking at the event, which was organised by the Bureau of Public Enterprises (BLE), Osinbajo, who is the Chairman of the National Council on Privatisation (NCP), noted that adopting investments for infrastructural development in the country is now an imperative as reliance on public expenditure alone is no longer sufficient or capable of meeting the $3 trillion needed to bridge the infrastructure deficit over the next 30 years.

“In spite of government interventions over the years, Nigeria still faces a huge infrastructural deficit, which is constraining rapid economic growth,” he said, adding: “The federal government recognises this fact which is why we are considering other approaches to complement and boost financing for the development and maintenance of infrastructure in Nigeria.”

Osinbajo noted that available statistic from the National Integrated Infrastructure Master Plan (NIIMP) and the Economic Recovery and Growth Plan indicate that Nigeria needs up to $3 trillion over the next 30 years to bridge the infrastructure gap.
Based on the statistics, he stated that the federal government would have to spend the entire revised 2020 appropriation of N10.81 trillion continuously for the next 108 years or more on capital expenditure to meet that target.

He explained that the fact that N2.49 trillion was appropriated for capital expenditure in 2020, underscored the importance of deliberate and pragmatic action to boost infrastructural spending.
On the benefits of effectively implementing PPP arrangement for Nigeria, the vice president explained that “if properly designed and executed, PPP models will unlock innovative infrastructure financing and management in a transparent and more efficient manner. Indeed, using PPP frameworks, Nigeria has the potential to attract and benefit immensely from the huge local and foreign private sector resources.”

On how the Buhari administration is leveraging the partnership with the private sector to bridge the huge infrastructure gap, Osinbajo said the federal government recently issued a circular on the administration of PPP projects in the country to provide the much-needed clarity.

The circular, he said, re-emphasised that the BPE shall be responsible for the concession of public enterprises and infrastructure already listed in the First and Second Schedules of the Public Enterprises Act.


Calling for the cooperation of all stakeholders for the effective implementation of the policy, Osinbajo noted that it was expected that this new policy direction would provide clarity to stakeholders and foster the improvement of PPP programmes in the country.

On the operations of the Infraco Company, Osinbajo said the company will be professionally run by select managers who are chosen by internationally accepted standards.
Calling on the private sector to support Nigeria’s efforts targeted at developing critical infrastructure through partnerships, the vice president urged all stakeholders to always see all sides of the infrastructure challenge in Nigeria stating that “the current deficit in Nigeria’s infrastructure presents both a challenge and an opportunity.

In his welcome address, the BPE Director-General, Mr. Alex Okoh, said it was evident from the cost implications that government alone cannot bridge the infrastructure gap, hence the need for alternative funding avenues through PPP.

Participants at the webinar were, among others, the Ministers of Mines and Steel Development, Mr. Olamilekan Adegbite; Industry, Trade and Investment, Chief Niyi Adebayo; Health, Prof. Osagie Ehanire; the Chairman, Senate Committee on Privatisation, Senator Theodore Orji; and the Director-General of the BPE, Okoh, who delivered the opening remarks.

 

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