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.
“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.