Benefits of govt’s planned $25b infrastructure fund, by experts

By Kingsley Jeremiah   |   03 November 2015   |   11:47 pm  
Osinbajo-4

Osinbajo

Experts have affirmed that the planned $25 billion (N5 trillion) infrastructure fund would bolster the nation’s enabling environment and pave way for stronger economic growth.

In separate recent chats with the media, the experts said that the projected improved growth from the fund would be achieved, even in the face of current dwindling commodity prices and recent economic challenges.

The Federal Government had on October 29 announced plan to establish a $25 billion infrastructure fund to invest in the transport and energy sectors so as to bridge the nation’s infrastructure deficit, which has grossly increased the cost of doing business.

Spokesperson for Vice President Yemi Osinbajo, Laolu Akande stated that the fund would be set up with contributions from local and international sources including Nigeria’s sovereign wealth fund.

Speaking on the issue, Chief Executive Officer, Infrastructure Bank, Adekunle Oyinloye said that though the fund was a seed money, it was a reflection of government’s commitment to kick start the country’s decaying infrastructure and set economy development rolling.

According to him, the attempt is an affirmation of government’s intention to fast track economic development and creates massive employment.
“The fund is a seed money because if you recall the nature of Nigeria’s infrastructure, the gap is estimated at about $23 billion as it were on an annual bases, so the $25 billion can only be said to be a seed money but is a very symbolic fund and proposal coming from the government to kick start the development of our infrastructure and arresting the decay that we are witnessing in every sector. Investors anywhere in the globe are looking for where they can get security for their investment and protection for it and that Nigeria present very strongly”, Oyinloye told CNBC Africa

He said that the buoyance and resilience of Nigeria’s economy remained a major factor that would drive investment from both local and international investors to help finance the infrastructure challenge.
Director of Africa Energy Capital, Anastasios Christakis said: “It is good the new administration sizes the needs of the country. The challenge is to implement a programme that meets the infrastructure needs. If the programme is in the form of public spending then the oil prices will dictate its viability but if (the funding) partially comes from private funding then the new administration has to embark into a massive campaign around the world to attract international institutional investors.

He stressed that the government would need time, competent human resources and patience. “I hope the Nigerian people would give time to President Buhari to deliver”, Christakis said.

Co-founder ‬of Capitech Partners Ltd, Kenny Daramola said: “There is an urgent need for the current government to move far away from the usual and adopt the unusual in addressing our infrastructural gap. Government must endeavour to create the enabling policies and environment that will encourage the private sector to participate fully in developing the Nigerian infrastructure”. ‬
“Government must deliberately refuse to depend on oil money to fund our infrastructural needs, where we are experiencing dwindling oil price, which is our primary source of revenue generation as a nation, there is need for government to become innovative, dynamic and adaptive”, he added.

According to him, the influx of Private Equity (PE) fund into Nigeria is far below average, government needs to see PE as a cardinal financial tool for rapid development of infrastructure.



  • Proud Yoruba

    People, Nigerians remit $26 billion yearly from abroad to their families in Nigeria, and you think that they cant fund your bloody $25 billion fund. There is absolutely no need to go to foreign institutional investors. Let Nigerians finance their own country’s infrastructure. It is just another form of capital flight when you allow foreigners to benefit from our borrowing and sidelining Nigerians. Even those in Nigeria can participate too, we don’t need outsiders, let outsiders come with foreign direct investments to augment, that is the best plan.

    I want to invest in my own country!

    • emmanuel kalu

      you are right. the problem is that we don’t have creative leaders, leaders that can think outside the box. This scheme is just the same usual thing, they would borrow from international organization, that would come in and make all this demands. each time we borrow from china, they demand that we use their companies, which means Nigeria companies don’t develop the capacity. Chinese would insist on using their materials, which again means Nigeria doesn’t benefits and these Chinese don’t provide capacity training or building. so Nigerian’s lose completely.

  • emmanuel kalu

    The key is the type of infrastructure this money would be use for. if we borrow this money and use it for projects that don’t generate revenue directly, we would wasting our time. we don’t need to borrow money right now for things that don’t actually directly generate income. borrowing to build roads, excerpt you toll the road, does not directly generate income. borrowing to capture more gas that is now sold to power plants, resident and commercial user is good. borrowing to build our railway system that would be able to move goods and people around the country, is good. borrowing to improve our ports to receive more ships especially port outside of lagos is good. borrowing to install modular refineries in most state is great. All this project are things that can immediately start generating income even if you just do one and then build out from there. Nigeria leaders need to tap the Nigerian’s around the world to raise the funds.

  • Adele Uhuru

    But they’ve already spent half of the aforementioned monies on the refilling of Lake Chad project, and I would insist that all these mouthing-off investments on Nigerian infrastructure will only be directed up North and up North only with the pretense that they are revitalizing the destruction wrought by their Kin (Boko Haram) insurgency- my point is it is all a sham to mismanage- actually redirect wealth accrued on the back of Niger Delta to benefit the unproductive but destructive Northern Nigeria…. My Thought !

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