President Goodluck Jonathan
In order to address the huge infrastructure deficit in the country, experts have called for an increase in funds dedicated to development of infrastructure in the country.
The experts, who spoke at the inaugural ESQ Project Finance Summit in Lagos Tuesday, decried the deplorable state of infrastructure in the country.
Head, Legal and Governance, Infrastructure Concession Regulatory Commission (ICRC) Mr. Joe Ohiani, in a paper titled: “Governmental Promotion of Infrastructure Development,” cited a recent report of the World Economic Forum, which showed that, though annual investment in infrastructure in Africa doubled from $17 billion to $35 billion between 2001 and 2009, the overall infrastructure spending needs for sub-Saharan Africa was estimated at $93 billion annually over the next decade.
He disclosed that between 1999 and 2007, the Nigerian government spent about N2 billion through direct budgetary allocations on basic infrastructure in agriculture and water resources, transportation, education, health, power generation and distribution.
He also warned that declining financial resources is making this option less feasible, thereby accelerating infrastructural deterioration.
Ohiani, however revealed that the World Bank had concluded plans to provide $200 million as a seed fund to set up a Financial Intermediary Loan (FIL) scheme under the Public Private Partnership (PPP) initiative. According to him, eligible participating financial intermediaries, particularly commercial banks with Africa Finance Corporation (AFC) as the lead, will lend the fund to qualifying private sector partners in a Public Private Partnership (PPP) arrangement.
He however emphasised that the objective of the scheme was to provide long-term funding for infrastructure development in the country, stressing that in selecting eligible projects, priority would be given to public investment projects.
Ohiani regretted that the Federal Government has been the sole financier of infrastructure projects and has often taken responsibility for construction, operations and maintenance, stating that the national fiscal budget was the principal source of financing infrastructure development.
“We have developed a robust database of concessions already entered into by the Federal Government. Also we are promoting the development of funding sources and instruments with long tenor for financing infrastructural projects and we are also working with National Planning authorities to integrate infrastructure in its framework,” he added
Speaking earlier, Chief Executive Officer, ESQ Seminars, Mr. Lere Fashola, said there was need to address challenges of bidding process in the electrical and power sectors.