Nigeria needs $2.9 trillion to finance infrastructure in 30 years, says Usman
A former Finance Minister, Shamsudeen Usman, yesterday projected that Nigeria would need $2.9 trillion in the next 30 years to finance infrastructure.
He spoke in Abuja at a public lecture organised by the National Institute for Legislative Studies (NILS).
According to him, a serious long-term economic strategy was needed to put the country in a better shape.
Usman, who is a former Deputy Governor of the Central Bank of Nigeria (CBN), projected that by 2043, the debt/GDP profile would be 25 per cent.”
He said: “To close the infrastructure gap and reach desired optimal investment, Nigeria must aggressively increase core infrastructure stock from 20-25 per cent in 2013 to 70 per cent in 2043.
Delivering a lecture titled: “Financing the infrastructure deficit in Nigeria,” he urged private sector funding, since public sector finances were already over stretched.
He listed sectorial targets and investment needs within the period to include: $800 for transportation, $900 billion for energy and $300 billion for housing, $350 billion for agriculture, water and mining, while social infrastructure would gulp about $150 billion.
Usman stressed that information communication technology would take $300 billion, while $50 billion would be required for vital registration and security.
“Nigeria needs to invest massively in infrastructure to meet not only its current needs, but also the requirement for its growing population, future economic growth and the UN SDGs
“The potential for private sector financing exists, but a number of critical issues need to be addressed to realise them in full. A number of quick wins, both in policy design and implementation could unlock the constraints to Nigeria’s quest of acquiring world class, integrated infrastructure over the next 30years,” he said.
Usman further projected that private sector investment requirement would increase from 46 per cent to 48 per cent during the first operational plan, 2014 to 2018.
He said these projections are crucial against the 2018 budget estimate, which is predicated on various assumptions.
He explained that the four primary options available for financing infrastructure development in the country include public current account, which he put at about $36 billion.
Others are public debt $29 billion, SWF and Pensions, $13 million, as well as Public Private Partnership, from $10 billion to $20 billion.
While calling for consistency in policies and programmes, he commended the administration of Muhammadu Buhari for embracing the National Integrated Infrastructure Master Plan (NIIMP).
The ex-minister noted that: “Plenty of mileage would be gained through continuing reforms aimed at reducing cost of projects and more focused anti- corruption crusade.
The Director General of NILS, Prof. Ladi Hamalai, said financing infrastructural deficit and proper debt management strategies are crucial to sustainable, economic growth and development in the country.
Participants at the event were drawn from the ministries of finance, budget and national planning, debt management office (DMO), Nigeria Deposit Insurance Corporation (NDIC) and the National Assembly Budget Research Office (NABRO).
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