Financing Infrastructure Deficit in Nigeria – Kenny Odugbemi

The federal government of Nigeria currently has a score point of 48.33%, leaving over 50% deficit

This infrastructural deficit ranked 24th out of 54 African countries

Nigeria will require between $(100-150)billion annually for the next 39years to close the deficit

Dataphyte provided an estimate of about $2.3trn, whilst Augusto & Co and World bank simultaneously agreed that $3trn investment will resolve infrastructure decadence in Nigeria.

FY 2022-Dataphyte confirmed that the size of our public debt has risen to N44trn excluding N23trn methods and meant as borrowing from Apex bank
FY 2015-2022, PMB budgeted N18.6trn to cover our debt service

This borrowing was expended recklessly with no meaningful impact on our infrastructure deficiency

This continued in FY 2015- 2023, Nigeria debt servicing has increased by 564%

Financing infrastructure deficit

FY 2024
Budget -N27.5trn
Revenue-N18.42trn
Recurrent-N9.92trn
Capital expenditure-N8.7trn
Deficit- N9.18trn
Borrowing-N7.45trn

Breakdown of infrastructure – Road infrastructure N657.23bn

PBAT administration shall need to seek substantial funding to execute multi-sectoral portfolio of infrastructure projects at the federal and subnational level

It is a proven fact that Nigeria going forward will have a serious deficit in the following
✓port infrastructure, ✓intermodal form of infrastructure ✓projects, power infrastructure
✓Agro allied services (to guarantee food security)

The deficit is presently an unrivalled opportunity for savvy investors.

Reflection
PBAT in this administration inherited serious liabilities and insignificant assets necessitating the to take bold steps without delay

Case study 1
Islamic development bank has announced the provision $50b as infrastructure fund through the Arab coordination group, there was a strong pledge that Nigeria will get a significant share based on our request for support

Case2
The World bank also pledged sum of $750m to execute renewable energy project called DEAR- Distribution access to renewable scale for 80m without access (Rural area) and inadequate supply in Rural Urban Settlement.
Private sectors will be required to provide counterfunds to execute this project
The target is $1bn injection to ensure economy of scale with suitable scaled pricing for solar home and mini-grid expanded small scale and Nano enterprises.

Case 3
African development bank to provide $350 to provide digital innovation to support youth unemployment

Case 4
Siemens in Germany intervention on power upgrade with project estimate of $2b for integration of hybrid power upgrade

Conclusion
The demand for infrastructural development will require a humongous amount of resources beyond the capacity and capability of the present administration and will require the intervention of the global development partners but we need to overcome the challenges of ethnic interests and entitled lobbyists for infrastructure provision across multiethnic states without viable business justification.