Report: Anaemic Infrastructure Nigeria’s Greatest Challenge

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Obinna Chima

Despite the numerous challenges facing Nigeria presently, the country’s weak state of infrastructure has been identified as its greatest challenge.

A report revealed that only 56 per cent of Nigerians have access to electricity, well below the average of 80 per cent for three comparison groups.

The Boston Consulting Group (BCG) stated this in a report titled: “Unlocking Nigeria’s Potential – The Path to Well-being,” made available to THISDAY. The report was jointly authored by Luis Gravito, Miguel Pita, Jaime Ruiz-Cabrero, and Wiebe Boer.

It noted that power outages are widespread in the country, stating that three-quarters of companies reported that the lack of reliable energy was a major constraint to their businesses.

According to the report, the country’s road network is also weak, with 0.21 kilometres of roads per square kilometre, compared with an average of 0.33 for the three comparison groups.

“Only about 30 per cent of the population has access to improved sanitation facilities (those that meet certain hygiene standards), and just 64 per cent has access to drinkable water (compared with an average of 88% for the three groups). These major infrastructure gaps create health challenges and limit job creation and economic diversification,” it added.

Studies showed that Nigeria would need to invest about $3 trillion in infrastructure over the next 30 years, or roughly $100 billion a year. That is equal to nearly 20 per cent of current Gross Domestic Product (GDP) annually.

To this end, the BCG report recommended five actions for addressing Nigeria’s infrastructure crisis.

Firstly, it called for the creation of a central body that is empowered to oversee the life cycle of infrastructure investments. The infrastructure effort, it stated must start with the creation of a central governing body with representatives from multiple stakeholders, including state and federal government. This body should appoint an executive group to manage infrastructure projects throughout their life cycle.

Secondly, the report urged the federal government to identify ten high-priorities, high-impact projects.

“The governing body should select ten landmark infrastructure projects that can be executed rapidly in order to generate early wins. The projects should offer a measurable short-term economic boost and long-term positive spill over effects, and, if possible, they should be geographically dispersed,” it added.

Thirdly, it stressed the need to conduct an international road show to line up private funding and establish public-private partnerships.

“The executive group should take an aggressive role in building connections with private investors. This includes developing a list of potential investors, such as sovereign funds, development finance institutions, and institutional investors. The government should organise a road show to brief investors on the projects. Deals should include some level of sovereign guarantee so that the risk-return trade-off for investors is adequate but not overly generous,” the report stated.

Furthermore, it urged the federal government to focus on flawless execution, adding that the government must develop the skills and talent to ensure excellence throughout a project—from the conception of the idea to the business plan to engineering, design, construction, and maintenance.

“It must also institute an effective and balanced negotiation process between the private-sector companies that operate the assets and the regulatory bodies that oversee them, guaranteeing full enforcement of tariffs and agreements,” it added.

Finally, it stressed the need to leverage momentum to create a sustained infrastructure-building drive, adding that with the ten initial projects under way, the governing body should develop a long-range plan involving another 50 or so projects. Given the dire state of Nigeria’s infrastructure, the push for investment must continue for at least a decade, the report added.

Nigeria boasts abundant assets—most notably, vast natural resources, arable land, and a young, entrepreneurial population. After a decade of steady growth, pro-market reforms, and increased political stability—as demonstrated by a successful democratic change in leadership—the country could be poised to enter a period of sustainable inclusive growth.
But major challenges stand in the way of such progress. Low oil prices have sent the naira plummeting and could lead to a serious economic slowdown. And the country has yet to make meaningful advances against some long-standing problems, including poor governance, corruption, widespread poverty, and inadequate infrastructure.