Championing Sustainable Interventions in Infrastructural Development

Championing Sustainable Interventions in Infrastructural Development

In a bid to address decades of infrastructural deficit that has riddled the nation, the
Nigerian Sovereign Investment Authority has begun to champion sustainable interventions across board, Chiemelie Ezeobi reports

Over the years, the nation and by extension, the economy, had been crippled by infrastructural deficit that cut across all sectors. With each administration, efforts to tackle it was done in half measures or with zero political will.

However, recently, the Nigerian Sovereign Investment Authority (NSIA), has begun to champion change through sustainable interventions. Aside that, the authority, which manages Nigeria’s sovereign wealth fund, are also
collaborating with the newly-established Infrastructure Company (Infra-Co) to help the company achieve optimal results from its mandate.

Addressing Infrastructural Deficit

To address Nigeria’s huge infrastructural deficit, President Muhammadu Buhari had recently approved the establishment of Infra-Co, a Public Private Partnership-styled infrastructure company with an initial seed capital of N1 trillion. It is also involved in building three major ‘legacy projects’ being the 127.6-kilometre Lagos-Ibadan expressway, 45-kilometer second Niger bridge and the 375-kilometer Abuja-Kano highway.

According to the Managing Director of NSIA, Mr Uche Orji said; “On the road projects, I have talked about the likelihood of the SUKUK fund, but operationalising these roads, completing the concession agreements for these roads and funding plans for the roads are very important, because I expect them to now start turning it into specific companies.

“These are going to be toll roads, I keep emphasising, and they will be run as business.
“The federal government set up the Presidential Infrastructural Development Funds to address the funding needs of the three projects. The objective of finishing them is to make them economically viable anywhere from 2022 into 2023.

“About Lagos-Ibadan Expressway, I know some people are still struggling with that, but you can also attest to the fact that a lot of progress has been made. We are over 60 per cent completed, I think 63 per cent on Lagos-Ibadan Expressway. I believe we should be able to complete that project by the end of 2022.

“On the Second Niger Bridge as at the end of the year (2020), we were about 53 per cent completed. I am hoping that by the end of this year, we will have completed the decking of the bridge. So, by the end of this year, I am hopeful that we can see a bridge.

“The original scope to the Abuja-Kano road will be done next year, the new scope, the Ministry of Works will give an update. So, all of these projects are moving at pace. Let me emphasise, these are going to be commercial economic corridors. There will be toll roads, trailer parks, there will be all sorts of things that are going to be added to those roads to make sure that they earn revenue.”

Tackling Funding Concerns

Essential to these projects are funding. On this, Orji further hinted at the NSIA plan to raise a SUKUK to address some of the funding concerns of the project. Also, it was noted that the recently recovered $311 million Sani Abachi loot from the United States and the Island of Jersey will be channeled into the three projects on equal basis.
So far, the Second Niger Bridge has gulped N116.7 billion as it is projected to cost N414 billion. The Lagos-Ibadan Expressway will cost the FG N311 billion while on the Abuja-Kano Highway, the government will spend N797 billion.

Phosphate Plant

Another major infrastructural development being undertaken by NSIA is Nigeria’s First Ammonia and Diammonium phosphate plant in Akwa Ibom State at an estimated cost of $.14 billion. To achieve this, the NSIA sealed the deal with the OCP of Morocco and the Akwa Ibom State government.

Partners in the deal include the Nigerian National Petroleum Corporation, Nigerian Content Development & Monitoring Board, Gas Aggregation Company Nigeria Limited, and Fertiliser Producers & Suppliers Association of Nigeria.

Essentially, the MoU comes under NSIA Gas Industrialisation Strategy and would drive implementation of the Multipurpose Industrial Platform project. The project is structured to commercialise Nigeria’s huge natural gas resources and meet Morocco’s demand for cost-competitive ammonia.

But $1.4 billion would be invested in building out the plant and its supporting infrastructure with a target operations-commencement date of 2025.
On this, ths NISA boss noted that raising the fund for the project would be easy in view of the current liquidity level at both the domestic and the international debt markets.

Explaining further, he said the NSIA had planned to raise $400 million from equity and $1 billion from debt instruments but changed the strategy since it now has over $500 million interest from equity interests. According to Orji, the authority will now raise only $900 million from the debt on the overwhelming equity interests seen by the authority.

He said: “It could be $900 million, it could be a billion and that is simply because the equity portion of the fund is seeing more interest now than we had planned. So there are a lot of people asking to have the opportunity to invest in equity. The original structure was for us to have about $400 million of equity and a billion dollars of debt.

“But at the moment we have over $500 million of equity interest. We might just for efficiency purposes restrict it to that and $900 million dollars of debt. Now where are we going to raise that? It is very simple. There is a lot of liquidity in the market at the moment. We are having to make a choice as to who will be the underwriter. And if you step back and look at the transaction itself, you have a 100 per cent off take guaranteed and so it is easy to fund projects like that.

“I think we are feeling very confident that somewhere at the international market and local market we will be able to raise the debt.”

The NSIA boss revealed that so far, there has not been agreement yet on the stake of the state-owned petroleum corporation in the partnership.
“It hasn’t been agreed. At the moment, the partners the OCP and the Nigerian Sovereign Investment Authority and NNPC are indicating interest in local content. But I think at the moment, the original partners are NSIA 50 per cent OCP 50 per cent at the development stage and will admit other equity partners soon which will include the NNPC, but the right portions haven’t been agreed between the parties”.

Boosting Healthcare

To boost infrastructural development in the healthcare sector, especially in the wake of COVID-19 pandemic, the NSIA donated 126 units of Patient Monitors and 63 units of Oxygen Concentrators to 21 healthcare institutions across the six geopolitical zones of the country.

The move is part of their COVID-19 relief programmes. With the nation’s economy still in recovery, the relief equipment is expected to add to the current stock of critical medical equipment required for the containment of the virus in Nigeria. The supply of oxygen concentrators and patient monitors is expected to boost government’s efforts to provide an efficient and effective healthcare response for those affected by the virus.

The shortage of oxygen concentrators and patient monitors had slowed the government’s ability in providing an efficient and effective healthcare response for those affected by the virus during the first wave of the pandemic.

He said, “We know that our nation is at war with this pervasive enemy and we will ensure that the virus won’t spread further. We are happy that the NSIA has assisted in providing these facilities and this equipment is a welcome development. It could not have come at a better time.”

He charged the healthcare centres that got the facilities to ensure that they are deployed in a manner that would help to save the lives of Nigerians, adding that “this administration will continue to come up with measures to stop the spread of the virus. We cannot stop the spread if we fail to take responsibility. To those in doubt, COVID-19 is real, wear your face mask, maintain social distancing and if you can, do not travel. I want us to treat everyone as a potential carrier of COVID-19”.

Still on healthcare, the authority operationalised the NSIA-Kano Diagnostic Centre; operationalised the NSIA-Umuahia Diagnostic Centre and Commissioned Administrative and Training centre for the NSIA-LUTH Cancer Centre.

It also commenced a plan to roll out additional healthcare projects across the country, just as they partnered University College London Consult to develop a pharmaceutical investment strategy with a plan to develop active direct investments in 2021.

On this, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, commended the NSIA board for providing the equipment, adding that through this gesture, the authority has been able to demonstrate that investment in healthcare is investment in the economy as it guarantees greater returns, adding that “I want to encourage the NSIA to continue its assistance in the health care sector. The equipment will help to offer succour to families affected by COVID-19″.

Scorecard

In the midst of all the infrastructural renewal going on, penultimate week, the NSIA released its 2020 performance scorecard which revealed that its total assets grew to N981.78 billion in 2020, at a time its counterparts across the world are limping.

The N981.78 billion is an increase of N331.93 billion when compared to the N649.85 billion recorded in the previous year. They attributed the growth in assets to discipline, strategic financial execution and consistent implementation of well-defined infrastructure investment programmes for the year.

It further weathered the COVID-19 storm owing to strong performance from its investments in international capital markets, improved contribution from subsidiaries and affiliates and exchange gain from foreign currency positions

Highlights of NSIA’s activities and performance during the period showed that they recorded 343 per cent growth in Total Comprehensive Income to N160.06 billion in 2020 as against N36.15bn in 2019. Excluding devaluation gain of N51 billion, core income of N109bn was recorded in 2020 compared to N33.07 billion in 2019.

The NSIA also received an additional contribution of $250 million; and provided first stabilisation support to the federal government where $150 million was withdrawn from the Stabilisation Fund. Also, to tackle the ongoing pandemic, Orji said the NSIA partnered the Global Citizen, a not-for-profit group, to form the Nigeria Solidarity Support Fund.

In essence, with all it has achieved and what it still aims to capitalise on, the authority is not slowing on its oars to renew the infrastructural deficit across board.

Related Articles