The Nation Newspaper

Tag: infrastructure

  • ‘Infrastructure key to housing development’

    ‘Infrastructure key to housing development’

    Mr. Taiwo Ogunbodede is Managing Director, Cross and Churchill Real Estate Limited and South West Chairman of the Real Estate Development Association of Nigeria. In this interview with Bukola Aroloye he speaks on the challenges of housing development and proffers way forward. Excerpt:

    Why do we continue to have shortage of houses in the country?

    First and foremost, the supply of housing is okay and the demand for it is always in place. What we don’t have is the housing units to fit peoples’ pocket and the housing type people put demands on. In 2010, where we had the stock market doing well, people were selling houses at N140 million to N150 million. People were buying, they didn’t mind the kind of houses; they didn’t care if it was messed up or it was badly built then. But now, buyers are more aware and more informed. Clients buying properties now ask for details like land areas, title on the land, title documents, etc.

    How do you make houses available to people with low income given the current economy?

    Nigeria is currently in a recession. We need houses for 17 million people. Yet, people wonder why the figures of 17 million deficits in the housing sector remain the same every time. What the United Nations means with this figure is that for Nigeria to qualify as a developed country we need 17 million houses of 21st century standards like bungalows, with facilities, it hasn’t gone down because we have increasing numbers of Nigerians year in year out. We have about 200 universities in Nigeria today; we have fresh graduates every day the graduates end up coming to Lagos, about 70 to 80 percent of these graduates come back to Lagos so they get job here and there. This makes the pressure of houses to be increasing the whole year. Total housing stock produced in Nigeria in a year is not up to 50, 000, annually. One of the biggest developer in Nigeria are the ones the Lekki Gardens did (6, 000 units) in one year; that is a massive record. The thing is that Nigeria needs more houses even if we start doing 10, 000 projects per year, we cannot meet the housing needs. So with the economy recession and low income for the people, how will they be able to afford. We live in an environment where property has become a social issue- everybody is looking forward to owning their own house. It is seen that if you don’t own your property or house in the society you hardly have achieved anything. Any house that cost about N5 million and below is affordable housing in Nigeria. Real housing will come into being when the federal government begins to put in place infrastructure. This is why I’m happy with what Governor Akinwunmi Ambode is doing in Lagos state. So let government put in place, first and foremost infrastructure and everybody will not have to live within the city- you can live in the outskirt once you are sure that you can get to your destination in the city within a limited time. The Real Estate Development Association of Nigeria (REDAN) is a pressure group, but we do not believe in confrontation, we will continue dialoguing with government and other stakeholders in the country on shelter issues.

    Can you give an insight into your product offering?

    It’s basically apartment based; we also have flats. We try to work with our team of architects and engineers and town planners to turn out the best in class and affordable apartment. In Lekki peninsula, we have homes in three distinct locations such that we provide options for our clients on choice of property and location. We believe so much in doing projects with midterm locations because we all know that the cost of land dictates the cost of property- the more expensive the land is the more expensive the project will also be.

    What is driving projects to the Lekki /Ajah axis now?

    Today in Lekki- Ajah axis, there is a lot of transformation. The traffic scenario is getting better, in six months now, I think about three roundabouts have been cancelled, and the three that is left is about to be demolished. The Ajah flyover is also about being completed.

    Who are the target audience for these apartments? 

    Every Nigerian- whether in at home or in diaspora, including foreigners as long as they are able and willing to invest in property; they must be 18 years and above and have a legitimate means of income. But I think our major target market is the middle income citizens of Nigeria. We are very affordable. One of the things I had issues with when I was growing up was when the property was a big deal you needed to have money starched or kept somewhere in big numbers for you to be able to key into any property. For me, it was a source of worry. So, what we have done is to create a mortgage- a kind of in-house mortgage for subscribers. So if you have a husband and wife working hard and they don’t spend their money on frivolities, they can have N25 million or a certain percentage of the total cost of the house and pay the remaining balance in 18 to 20 months. So these projects we put in the market really benefit people.

    Most of your properties seem to be located in Lekki peninsula. Why is this so?

    In the past we have done project all over Lagos; we had housing project in Ofada town- in those days when Ofada was the reigning axis in late 2007 to 2012. We also came to Igbesa, near Agbara, we also have plots in Ikorodu where we tend to develop. So, as a company, we have about six to seven locations where we intend doing development. We have plans for Ikorodu where we have 10 hectares. When it comes to development the major issue is funding and of course, if you must also pay attention to details. When you start to be everywhere at the same time, what that means is that it will bring a shrinkage in quality, which is why we are choosing this location first. You must be aware that where there are no infrastructures, then development will be difficult. For instance, when we went to Igbesa the roads where very impassable, so until you have the right infrastructure, development of properties will continue to be hampered in certain places.

    Are you talking to government concerning your project in Ofada especially when you consider the location in respect of infrastructure?

    We got to Ofada in November 2007 at that point in time where there were not more than a handful of developers in the area. The community benefited from the developers doing business in that same community, and lots of estates sprang up. But I think the developers there were not cohesive enough to gently engage government in time, because soon government of Ogun state under Governor Gbanga Daniels, obviously thought that since developers were buying up land there, then it was a good place for government to rake in good revenue. When we bought the land in Ofada, it was free from all forms of government acquisition. But one day, government just came and placed almost the whole of Ofada under acquisition. But government is not saying that you cannot build there, but they wanted money so they said developers had to come and do ratification. We had no problem with that but we realised that they placed a N6million fee on an acre, meaning that it came at N1 million per acre; meanwhile we had sold land to people at N250, 000 or N300, 000 per plot, and some sold at N500, 000. So even if we agreed to pay that amount to government, how can we go back to subscribers and tell them that that should come and pay extra for what they had bought. Unfortunately, this incident happened at the height of the first global recession of 2009. Most subscribers were even asking for refund. We approached government and said this thing, the way it has come up, can’t work; and half of every property in Ofada then was shot down- some people had hope and they kept faith with it. However, we are reaching out to the current governments of the South West before the year ends on developmental matters. We believe that when we reach out to the state governments they will see reasons, not because of us but because of the various subscribers and the need for shelter for the people. Ogun state government has a huge advantage because it has more lands than Lagos state government; the state borders Oyo state and Ondo states and these are two prime states. From oyo state you can go to the north from Edo you can go to the East, so Ogun has land all over the place. But nobody is developing the state because we have some conditions; Ogun state government are is making a big mistake by comparing itself to the Lagos state government; they want to make it the way Lagos state is making it overnight and this can’t work. I believe that as we persuade and meet the state government and they see it from our own side that they would change some of their policies they currently have. So from that point we will be able to have more lands in Ofada, Most of these companies we see in Ofada are doing business in other places, because as the chairman, I know of a truth that they are doing businesses in other places. So most of the developers you see in Lekki, Ikeja, Maryland and other places have done business in Ofada before now. Ofada will pick up and I am very optimistic about that and the various investors and subscribers will take good care of their project.

  • Community agonises over infrastructure, kingship dispute

    Community agonises over infrastructure, kingship dispute

    The Amanuke community in Awka North Local Government Area of Anambra State is grappling with many headaches. Infrastructure in the area is horrible. Worse, their traditional royal stool is also hotly contested by two claimants. This has left the people divided.

    Amanuke, located about 10 km north of Awka, the state capital, is in agony. The community lacks potable water, electricity, goods roads, while its primary, secondary schools and hospitals have all but collapsed.

    The residents are lamenting their misery, and have called on the state government to come to their rescue.

    They also complained that peace has taken flight from the area because of lack of a traditional ruler. Since the death of their traditional ruler, the late Igwe William Ezenwa many years ago, two relations have laid claim to the traditional stool.

    When The Nation visited the community following the lamentations of the residents, it was discovered that pupils were learning under the trees.

    The primary health centre, which used to compliment general hospital for the rural area has collapsed. From down to the top of the hospital, there was no single equipment, while domestic animals, and human excreta as well as skeletons of dead animals littered the floor.

    The Nation gathered that the hospital was built between 1978 and 1983 through self-help by the people of the community and handed over to the state government during the regime of former governor of old Anambra State, Chief Jim Nwobodo.

    The same story is equally told of the community’s primary health centre with about two bungalows already collapsed, while the remaining buildings are a shambles.

    There was no single person or worker to speak on the condition, while the premises were like a ghost land.

    At the community’s secondary school, the situation was the same with nine out of the 12 buildings already dilapidated, while the two others housing the corps members were not suitable for human habitation.

    Speaking with The Nation, Mrs. Grace Okafor, a resident, described the situation as living in hell.

    She said it had been over 20 years since the hospital was abandoned, adding that the residents seek for alternative at the Awka capital city.

    “Our roads, hospital, primary health centre, secondary school, market and others are all dilapidated,” she said. “Amanuke community is one of the major food baskets of Anambra State, but we have never received any form of support from the government, we only hear that government supports agriculture.”

    Mrs. Uju Onwunili told The Nation that some of them go to a community about eight communities from Amanuke for ante-natal care.

    One of the community leaders, Hon. Ebenezer Okafor told The Nation that Amanuke had become an abandoned community in the state.

    Mr. Angus Dike decried the level of decay in the community, which he blamed on the tussle over traditional stool.

    He said the N20 million “choose your project” initiative by the Governor Willie Obiano administration, has been hijacked by certain people.

     

  • Appraising Kaduna’s smart infrastructure plan

    SIR: Kaduna State government surely knows that infrastructural development is a straightforward way to inject money into the economy and lay the foundation for long-term growth. This is why it has committed N108 billion of its 2016 budget to capital expenditure and N130 billion in 2017.

    Already, 421 contracts have been awarded for renovation of public primary and secondary schools in the state. These renovations are complete with the provision of solar-powered bore holes and cubicle toilet blocks. The aim is to expand class sizes to the extent that they cater for school enrolment rates which have soared from about 1 million pupils in 2015 to 1.8 million currently.

    In the same vein, the Dangote Group alongside the Bill and Melinda Gates Foundation have provided funding support to the Kaduna State government for the renovation and equipping of one Primary Health Care centre in each of the 255 wards in the state. Imagine how much of the state’s health burden will be relieved if 255 PHC’s function optimally across the state.

    In the years leading up to 2015, much of the state was without potable water. This will change in early 2018 when the N50 billion Zaria water facility is completed. Thanks to the African Development Bank and Islamic Development Bank, the Zaria water project will supply 150 million litres of water daily and provide water coverage for 2.2 million people across seven local government areas. Even for agriculture, the sludge generated from the water treatment process will be used as fertilizer.

    In 2012 and 2014, construction on the project was disrupted when the contractors abandoned site due to the inability of the government to offset some N3.2 billion payment for completed and future works. Now, thanks to a deal brokered by the governor and his team, the contractors will accept staggered payments of N300 million monthly until all outstanding on the project are cleared.

    It is in making smart deals like these that the state raises the required funds for most of its infrastructural projects.

    Already, the state government has begun a redesign of its entire transport infrastructure. With the support of the Nigeria Infrastructure Advisory Facility (NIAF) and funds from the UK Department of International Development (DFID), a transport policy was launched in 2016. The policy will ensure accessible and reliable public transport service that meets the mobility needs of the state.

    The Zaria road in Rigassa, the Rabah road and Kawo roads are very major entry, intra and exit ways for Kaduna State. Unfortunately, these roads have become peculiar traffic areas. The State Government has responded to this by implementing measures that streamline traffic inclusive of dualizations, repairs to dilapidated roads and the introduction of a bus rapid transport (BRT). The BRT will have an exclusive lane such that it can operate even at times when traffic is the most congested.

    Besides these efforts, a N10 billion proposal was included in its 2016 budget to construct a Metropolitan Rapid Rail Line. The line will run through the Millennium City to Rigassa and Mararaban Rido, Zaria expressway to Sabon-tasha, Mando and Nnamdi Azikwe expressway. Expressions of interest have been sent out and a prequalification carried out on 18 companies.

    The Kaduna State Governor, Nasir Ahmad el-Rufai knows that infrastructure spending unlike any other form of government expenditure puts an economy firmly on the path of sustained progress. This is why his administration is committed to putting in place infrastructure that guarantees easier access to both education and health services, improved transportation systems that result in easy accessibility and an overall increment in the standard of living.

     

    • Bukola Ogunyemi,

     Lagos.

  • ‘Infrastructure’ll drive real estate growth’

    ‘Infrastructure’ll drive real estate growth’

    The Managing Director of Cross and Churchill, Mr. Taiwo Ogunbodede, has said the full potential of the real estate sector can be better realised if the government put in place adequate infrastructure.

    Such endeavour, he further said, would also stimulate faster growth in the real estate sector.

    Ogunbodede, also the Chairman, Real Estate Developers Association of Nigeria (REDAN), Southwest chapter, with adequate infrastructure in place, people do not necessarily have to live in cities at exorbitant costs.

    “Housing will come into being when the Federal Goernment begins to put in place infrastructure. I like what Governor Akinwunmi Ambode of Lagos State is doing around Epe Division. The entire road network in Epe is on another scale. It means that you can live in Epe and work in Ikeja or on the Island. Coscharis is in Awoyaya, who would have thought that such a firm will come to Awoyaya? That is the effect of having good infrastructure in place,” he said.

    According to Ogunbodede, there is and there will always be demand for housing in the country. However, he said, what is lacking is the housing units to fit peoples’ pockets, and the housing type people put demands on. For instance, he explained that in the years the stock market boomed, people sold houses at N140 million to N150 million, because they made good returns on their stocks within a very short time. But things have since changed now meaning that developers and potential home investors have to check their pockets.

    On the increased survey fees being put in place by the Lagos Chapter of the Nigerian Institution of Surveyors (NIS), Ogunbodede said it is sending a dangerous signal to other professional bodies in the built environment. For instance, he explained that if a client is interested in buying a land for N4 million and he is being asked to pay N300, 000 as survey fees, then such a client can back out of such transaction.

    “I think it is not a fair thing to do at this time of recession; things like this can be a disservice to affordable housing which we all are trying to achieve,” he said.

  • Hope rises as Africa holds infrastructure investment summit

    Hope rises as Africa holds infrastructure investment summit

    There is fresh hope of more investment in infrastructure on the African continent as a global law firm, Hogan Lovells,  leads sponsors list of an investment summit to be hosted by the Africa Finance Corporation (AFC).

    The summit, scheduled to hold in the Federal Capital Territory, Abuja, on May 15 and 16, will feature a number of high-level participants from government and the private sector, including having the Presidents of Nigeria, Ghana and Uganda in attendance.

    The Head of Hogan Lovells’ Africa Practice, Andrew Skipper, will lead high-level discussions on catalysing investment and leveraging success stories in the African infrastructure space.

    The summit is already generating excitement among stakeholders in the industry, who are concerned about the state of infrastructure on the continent. While Africa may be the world’s fastest growing continent, access to basic infrastructure services remains a critical challenge across the continent, with studies showing that poor road, rail and port facilities add 30 to 40 per cent to the cost of goods traded among African countries. An often quoted World Bank report suggest that Africa needs to spend $93billion annually until 2020 to bridge its infrastructure gap.

    This explains why AFC Live has been created to provide a platform to develop solutions that will fast track African and international capital towards infrastructure. Although investments in energy and in transport can offer better commercial and social returns than most investments, stakeholders however believe that creating the right structure to make these projects commercially attractive requires skill as well as political will and a conducive regulatory environment.

    In this instance, the sponsors of the summit, Hogan Lovells, is believed to have the requisite knowledge and experience to help countries and clients navigate through. This is buoyed by the firm’s several decades spent working across the continent, covering almost 50 countries and a network of local law firms in all but two African countries. This has also helped the firm to develop an intimate knowledge of the continent’s business environments.

    “We are thrilled to be the lead legal sponsor for this event because we believe in and want to support business on the continent. Infrastructure plays an incredibly important part in any country’s growth story and in Africa, it is vital,” Skipper said.

    On the challenge of project funding, he explained that African-focused direct foreign investments (DFIs), Export Credit Agencies or foreign grant funds, cannot entirely fund the continent’s infrastructure needs.

    Skipper further explained that international investors and commercial lenders need to adjust their thinking on a range of issues in order to encourage an appropriate view on acceptable risk allocation and investor returns in these sometimes complex markets.

    He contends that by bringing financiers and investors together alongside project developers and fund managers, AFC Live aims to ensure that more capital, both African and international, can be deployed towards addressing the continent’s pressing infrastructure needs. “Hogan Lovells are proud to be a longstanding partner to investors, sponsors, developers and governments on this journey,” Skipper said.

  • Entrepreneur calls for upgrading of infrastructure, interface of TICs

    Executive Director, Great Danty Company Limited, Mr Tytus Gbalipre, has called for the upgrading of infrastructure in the Technology Incubation Centres (TIC) across the country and interfacing among centres to enhance output.
    Gbalipre made this call in an interview with the News Agency of Nigeria (NAN) in Abuja.
    According to him, the state of infrastructure in the TIC centres is poor and should be upgraded to meet the current challenges facing the entrepreneurs.
    Technology Incubation Centres are created by the National Board for Technology Incubation to pursue commercialisation of technologies and technical innovations.
    The aim is to enhance industrial and economic competitiveness of the nation.
    He said: “Most of the facilities are outdated and should be phased out and new ones should be brought into the centres so that the entrepreneurs can be more productive.
    “Some of the buildings have leaking roofs, this does not make the environment conducive for people to work and you know that a conducive and relaxed environment contribute a lot to optimal productivity.
    “There are many things that can be done to improve the work that entrepreneurs do if the country must achieve its goal of economic diversification; it should not just be a normal government proclamation.
    “Government should show its commitment of diversification by investing in the TIC centres, fund them, provide infrastructure and buy the products produced by the entrepreneurs to be used by government agencies.”
    According to him, government should also give its support to the centres by giving them the opportunities to produce things that will be used by its agencies.

    Gbalipre emphasised the need for collaboration and interface among TIC centres to encourage cross fertilisation of ideas among the entrepreneurs.

  • Borno billionaire commends Shettima…promises support in agriculture, infrastructure

    Borno born billionaire and owner of Oriental Energy  Alhaji Mohammed Indimi is surprised at the magic wand Gov. Kashim Shettima is using to develop Borno State despite the Boko Haram challenges facing the state.

    According to Alhaji Indimi, the governor’s records of achievement are unbelievable considering  the manner the governor has changed the face of Maiduguri and other parts of the state with very meager resources and the Boko Haram crisis.

    Gov. Shettima who visited the billionaire at his  residence in Maiduguri on Thursday is a follow-up to Mr. Indimi’s pledge to support the state’s recovery plans in agriculture and infrastructure as part of his contribution to the rehabilitations and resettlement of communities destroyed by the Boko Haram insurgents in the state.

    Indimi said, “What you are doing in Borno State despite small resources is unbelievable. I don’t know how you are doing it. You have completely changed the face of Maiduguri. I have been to many states and I can say that many leaders do not come close to what you are doing in Borno State.

    “In the past, whenever I had foreign visitors coming to visit me in Maiduguri, I made sure they arrived Maiduguri at night so that they wouldn’t see horrible sights but today, I make sure my visitors come in the day time because I am proud of what they will see on entering Maiduguri. If you arrive Maiduguri today, you will know there is government in place. The city is becoming more and more beautiful and I am very proud because today my State (Borno) can compete with any state in this country.

    “Sometimes I feel as if I am the one telling you what to do and the reason is that most of your developmental projects are things I always wish for Borno. I don’t know how your mind works, maybe from your background, but really you are doing so many things and we have to support you,” Indimi said.

    He disclosed that he had also carried out some independent evaluation of the projects embarked upon by  Shettima outside Maiduguri, stressing that the reports he received were impressive.

  • ‘Infrastructure vital to economic growth’

    ‘Infrastructure vital to economic growth’

    Sohail Ahmed Khan is the new Managing Director of MAN Diesel & Turbo Nigeria Pvt. Ltd. With its Nigerian subsidiary, the German engineering company seeks to contribute to industrial growth in Nigeria and the West Africa sub-region. Assistant Editor Okwy Iroegbu-Chikezie  met him.

    What is MAN Diesel & Turbo’s business focus in Nigeria?

    Our products are at the heart of various key industries. Examples include large diesel engines and power plants, as well as compressors and turbines, especially in Nigeria. We are a strong partner for the oil and gas industry, for power generation and large-scale industrial production. And from here, we serve customers across the West African region, namely the ECOWAS countries.

    Your company opened its subsidiary in Lagos in 2015. Now the industrial growth rate in Nigeria is declining, how does it impact on your plans?

    It is true that the economy has suffered lately, mainly from dropping oil prices. But we are convinced that this will not interfere with the long-term growth potential. A positive example is a multi-million dollar order that we were able to book some weeks ago, to provide turbo machinery equipment for the Dangote Refinery in Lagos. It is nothing less than Africa’s largest refinery that is being built here in Nigeria. This billion-dollar investment by the Dangote Group is a good example of the added value we bring in terms of technology.

    What is the most important need of the economy?

    Infrastructure is the important need the economy can build on, whether a stable power supply or a dependable transport network for oil and gas. An example, one can think of the West African pipeline and the Trans Sahara pipeline project, the second one still to be built. Both are infrastructure projects opening up new markets for natural gas from Nigeria, requiring a safe and reliable technologybase.

    On the other hand, an evolving economy like Nigeria requires more depth of added value, and this has  started.We see it in projects with our customers, including requirements for in-country value. The country will profit from broadening its industrial footprint. An illuminating example is again the Dangote Refinery project: by prolonging the value chain into the downstream sector, more value will be created within the country, while also reducing the need for fuel imports.

    What about the industries not related to oil and gas?

    Irrespective of business sectors,  reliable energy supply is crucial for Nigeria. Whether for the booming banking sector, or just for powering the many mobile phones, the country needs electricity. We see an instant demand here for generation capacities of around 4 GW.

    As a country rich in oil and gas, many economic questions are obviously related to that business. But apart from that, or from power generation, MAN Diesel & Turbo provides products and services to a range of industries. We are here to support the Nigerian growth path as a whole, be it with equipment for the fertiliser industry, for the steel or cement industry oreven for paper production.

    Your company is one of the oldest in Europe, with a history of more than 250 years. What experience does it have in doing business in Africa?

    We have been doing business in Africa for about six decades. The initial projects of the company date back to the 1950s, when we first delivered power generation technology to Mali and Senegal. Today, we have an installed base of almost 1000 turbo machinery casings and an engine base of far more than 3 GW, delivered to more than 35 countries in Africa.

    As an ambassador of Germany-based technology, MAN Diesel & Turbo also has subsidiaries in Kenya, South Africa and Egypt, and we are about to expand this network in Africa in the near future. Our service workshops enable us to process service and maintenance orders regionally. And with more than 250 employees on the continent and a pool of field service engineers, we are available with a single call, wherever our customers in Africa are.

    What about your projection for Nigeria in the near future?

    Nigeria is surely more than oil and gas, if you just think of the booming online sector, especially for mobile payment and banking. Yet, the country’s economy still strongly depends on the worldwide oil prices. Happily, we are  seeing first signs of relief here.

    I see more diversification and a growing industry base in Nigeria. Again, the refinery sector is a good example, which the government is opening up for private investment. Not the least, this will help Nigeria to profit from increased in-country value. The country is about to choose its path when it comes tostrengthening its industrialinfrastructure with reliable and even eco-friendly technology.

  • Stomach infrastructure has failed in Ekiti, says APC chieftain

    Stomach infrastructure has failed in Ekiti, says APC chieftain

    In All Progressives Congress (APC) chieftain in Ekiti State, Olajide Akinyemi, has promised to use agriculture as a catalyst to develop the Fountain of Knowledge and banish hunger, if he becomes the governor.

    Akinyemi in an interview with The Nation in Ado Ekiti, the state capital, said Ekiti has no business being poor if its rich agricultural potentials are well developed and harnessed for the good of its people.

    He chided the Ayo Fayose-led administration for abandoning agriculture and deceiving the people with stomach infrastructure which, according to him, has further unleashed hunger on the state.

    Akinyemi said Fayose’s stomach infrastructure has failed the people with civil servants being owed arrears of five months, adding that local businesses have been killed with ‘outrageous’ taxes and harsh economic policies.

    He said: “It is apparent that Fayose’s stomach infrastructure has failed our people. It was a gimmick used to deceive the electorate. But, we can give our people through investment in agriculture.

    “This will ensure food security, provide more employment opportunities by taking our youths off the streets and also generate revenue into the coffers of our state. “

    The aspirant, a farmer and investor said the sector can employ not less than 50 per cent of the population in the state.

    He promised to establish a youth commercial agriculture scheme in all the 16 local government areas to produce cocoa, plantain, cassava, timber, in large quantity for local consumption and foreign exchange.

    Apart from agriculture, Akinyemi promised to make micro-credit loans available to small scale traders, young school leavers, women groups and artisans to own and grow their businesses.

    He described the APC as the only party that has the interest of Ekiti at heart, expressing the confidence to win its ticket and the governorship at the 2018 polls.

  • Fed Govt eyes private capital, boosts spending on infrastructure

    Fed Govt eyes private capital, boosts spending on infrastructure

    The Federal Government aims to raise the proportion of the government spending on infrastructure to 30 percent from 10 percent and to mobilise private capital for additional funding, Finance Minister Mrs Kemi Adeosun said at the weekend.

    The government plans to spend N7.29 trillion in the year, up from N6.06 trillion  budgeted for last year, but must find funds to cover a big shortfall in the budget, resulting from lower prices for oil, its main export.

    Mrs Adeosun said she was committed to boosting capital spending across key areas, such as power, transport and water, which would help underpin growth in agriculture, mining and manufacturing.

    “We will now target 30 percent of government expenditure on infrastructure, up from 10 percent,” she said at an investor conference in  Abuja.

    Mrs Adeosun said the government would tap private capital to complement its own expenditure, adding that fundraising was in progress for housing and road trust funds in partnership with the private sector.

    She said Nigeria wanted to move towards longer term funding at lower cost. The government has said it plans to borrow up to $10 billion this financial year, with about half coming from foreign sources.

    To help cover the deficit, the country sold $1 billion worth of 15-year Eurobonds this month that were almost eight times oversubscribed. The government is now seeking approval from National Assembly to issue an additional $500 million Eurobond.

    Africa’s biggest crude producer has seen revenues plunge along with the price of oil and is mired in its first recession for 25 years.

    Nigeria’s overall debt was 84 percent domestic and 16 percent foreign, but the government wants to move to 40 percent foreign debt by the end of 2019 to speed up infrastructure projects and cut borrowing costs.

    On Thursday, the government said it would launch a N20 billion “green bond” in April to fund projects to reduce carbon emissions and develop renewable energy.

    It also plans to raise a debut $300 million diaspora bond abroad and sell a maiden sovereign sukuk in the local market.