To bridge the infrastructure gap of her growing economy over the next 30 years, Nigeria would spend about $3 trillion.
Minister of Solid Minerals Development, Dr Kayode Fayemi, who spoke yesterday in London, United Kingdom (UK), at a business forum organised by the Royal African Society, quoted a recent report by the National Integrated Infrastructure Master Plan, which said Nigeria’s core infrastructure stocks gap, based on international benchmarks, is estimated at $80 billion.
Fayemi who presented a keynote address titled: Mining for prosperity: Fueling Nigeria’s industrialisation in the 21st Century, said the investment would allow Nigeria to close its current infrastructure gap and sustain an ideal infrastructure stock level of 70 per cent of the gross domestic product (GDP) and build infrastructure assets across the seven critical sectors of roads, rail, ports, airports, power, water and information communications technology (ICT).
He said iron ore and steel would account for the bulk of materials inputs needed to industrialise the country, just as he urged investors to take advantage of the country’s huge steel market.
Fayemi said: “We project a steady increase in domestic demand for steel in Nigeria in the coming decade, driven by increased industrialisation that will ignite a surge in building construction, power, automotive construction, agriculture, road and bridge building, military technology and infrastructure development, refinery investments and other heavy duty machinery.
“This ever-widening vortex of hunger for steel and iron ore is an opportunity for local and international investors to participate in the consolidation and expansion of Africa’s largest economy.”
He added that local producers were meeting just about 25 per cent of demand in the sub-sector, a development he said provides the required optimism for foreign investors.
Fayemi hailed the success recorded in the limestone, where Nigeria moved from being a net-importer of cement to a net-exporter in less than a decade of putting in place the right policy and necessary incentives for local manufacturers.
“We are working with all stakeholders in the industry to encourage replication of the limestone success story in the beneficiation of other industrial minerals, towards powering the industrialisation of the country.
“Our aspiration is to build a world class minerals and mining ecosystem designed to serve a targeted domestic and export market for minerals and ores,” Fayemi said.
He said the country would focus on minerals , mining and related processing industry over a three -phased period to achieve this.
“Phase 1: Nigeria will seek to rebuild market confidence in its minerals and mining sector and win over domestic users of industrial minerals that import. During this phase, Nigeria will also seek to expand use of its energy minerals. This phase will likely last about two-three years.
“Phase 2: Nigeria will focus on expanding our domestic ore and mineral asset processing industry. This phase will last about five to 10 years.
“Phase 3: Nigeria should seek to return to global ore and mineral markets at a market competitive price point. We expect this to coincide with the next commodity upswing,” he said.
Federal Capital Territory (FCT) Administration has proposed to spend N241, 467,231,031 this fiscal year for its capital and recurrent expenditures.
FCT Minister Malam Muhammad Bello made this known during the defence of the 2016 FCT Statutory budget before the Senate Committee on FCT at the National Assembly Complex, Abuja.
The minister said of the N241,467,231,031 proposed, N149,056,610,051 which represents 61.73 percent goes to capital expenditure.
Bello said personnel cost is N52, 371,352,360 which also represents 21.69 percent of the total expenditure.
According to him, the overhead is the least with N40, 039,268,620 out of the N241, 467,231,031 which is 16.58 percent.
While saying that this year’s budget is a departure from the previous ones because of the importance his administration attaches to infrastructural development of the entire Federal Capital Territory, the minister disclosed that N2,400,000,000 has been set aside for debt servicing.
In a statement issued by the Deputy Director/Chief Press Secretary, Muhammad Sule, the minister assured that attention would mostly be given to on-going projects this fiscal year to fast track solid development of the Federal Capital Territory.
Bello further assured that the cleanliness of Abuja remains a top priority of his administration and that was why there was a complete change of leadership at the Abuja Environmental Protection Board (AEPB) which is now being assisted with an enforcement team of 200 security personnel drawn from the Nigeria Police Force and Nigeria Security and Civil Defence Corps led by a retired Squadron Leader.
The minister emphasised that significant activities would be noticed in that area because cleanliness has no alternative.
In his opening remarks, the Chairman of the Senate Committee on FCT, Senator Dino Malaye promised that his Committee will work assiduously to pass the Appropriation Bill into law.
The FCT Permanent Secretary, Dr. Babatope Ajakaiye, Acting Secretaries of Mandate Secretariats, Directors as well as other top officials of the FCT Administration accompanied the FCT Minister to the Budget Defence.
Federal Capital Territory (FCT) Administration has proposed to spend N241, 467,231,031 this fiscal year for its capital and recurrent expenditures.
FCT Minister Malam Muhammad Bello made this known during the defence of the 2016 FCT Statutory budget before the Senate Committee on FCT at the National Assembly Complex, Abuja.
The minister said of the N241,467,231,031 proposed, N149,056,610,051 which represents 61.73 percent goes to capital expenditure.
Bello said personnel cost is N52, 371,352,360 which also represents 21.69 percent of the total expenditure.
According to him, the overhead is the least with N40, 039,268,620 out of the N241, 467,231,031 which is 16.58 percent.
While saying that this year’s budget is a departure from the previous ones because of the importance his administration attaches to infrastructural development of the entire Federal Capital Territory, the minister disclosed that N2,400,000,000 has been set aside for debt servicing.
In a statement issued by the Deputy Director/Chief Press Secretary, Muhammad Sule, the minister assured that attention would mostly be given to on-going projects this fiscal year to fast track solid development of the Federal Capital Territory.
Bello further assured that the cleanliness of Abuja remains a top priority of his administration and that was why there was a complete change of leadership at the Abuja Environmental Protection Board (AEPB) which is now being assisted with an enforcement team of 200 security personnel drawn from the Nigeria Police Force and Nigeria Security and Civil Defence Corps led by a retired Squadron Leader.
The minister emphasised that significant activities would be noticed in that area because cleanliness has no alternative.
In his opening remarks, the Chairman of the Senate Committee on FCT, Senator Dino Malaye promised that his Committee will work assiduously to pass the Appropriation Bill into law.
The FCT Permanent Secretary, Dr. Babatope Ajakaiye, Acting Secretaries of Mandate Secretariats, Directors as well as other top officials of the FCT Administration accompanied the FCT Minister to the Budget Defence.
The Managing Director, Nigerian Aviation Handling Company (NAHCo), Nobert Bielderman has said the firm has invested N1.4billion to upgrade infrastructure and equipment after its privatisation.
Bielderman who spoke when he led other management staff of the company on courtesy visit to the Acting Director-General of the Bureau of Public Enterprises (BPE), Dr. Vincent Onome Akpotaire in Abuja, said NAHCo was poised to sustain its position as a leading success story of the privatisation and reform programme of the Federal Government.
A statement endorsed by BPE Head, Public Communications, Mr. Alex Okoh explained that Bielderman said having grown NAHCo’s revenue base from N3.5billion to N8.5billion in the last six years, the enterprise was determined to sustain the tempo, despite the current economic downturn.
He said the investments made in the acquisition of new equipment, human capacity development and good corporate governance would enhance optimal service delivery and shore up the firm’s revenue base.
According to him, the firm which was privatised through a public offer in 2006 and promptly listed on the Nigerian Stock Exchange (NSE), has recorded favourable profit margin for shareholders above the 50 kobo share price before privatisation. He assured the shareholders that managemnt will sustain the prompt payment of their dividends.
He said the firm paid N26million as taxes to the federal and state governments yearly and attributed this to the dividends of privatisation.
Responding, Dr. Akpotaire noted the giant strides NAHCo has made and said it was indeed a success story of privatisation. He promised to assist the firm to overcome some of its challenges.
He said though the Federal Government had no equity in the enterprise since its privatisation, the Bureau was keenly interested in NAHCo’s progress. He applauded the company’s position on the NSE ratings and its second position on the Global Risk Rating Award.
He however urged the company to do more in the area of Corporate Social Responsibility (CSR).
As the world adjusts to the so-called ‘new normal’ for daily crude prices, the Organization of the Petroleum Exporting Countries (OPEC) has the challenge of balancing the geopolitics of oil with the global economics of oil. For petrodollar economies with looming recessions and systemic vulnerabilities, this is one of the biggest tests of leadership and vision. In relative terms, some petrodollar countries like the United Arab Emirates (UAE), Qatar, and Russia have long diversified their economies despite the importance of crude revenues — the UAE’s Dubai is more known for tourist attractions, world’s tallest buildings, and daring investments than her important oil industry. For Africa’s largest oil producer, Nigeria, deep systemic vulnerabilities to crude prices implies diversification is no longer an option, but an imperative course. More importantly, the bedrock of all transformative and impactful diversification strategy as seen in Dubai, United States, China and others is infrastructure. The challenge for Nigeria is not her well-documented infrastructure deficit but how to develop in the ‘new normal’!
On April 25th, Saudi Arabia’s 30-year-old Deputy Crown Prince Mohammed bin Salman, unveiled a bold 15-year plan to restructure Saudi’s economy. The bold ambition includes the creation of a US$ 2Trillion Sovereign Wealth Fund, partial public offering of Aramco, and large privatization of state-assets. These ambitious plans by the world’s top oil producer underscore the urgency of diversification and global shift in ‘petrodollar economics’. Perhaps, the Saudi government was motivated by a new precedence: the world’s largest and much diversified economy, the United States, was the largest oil producer and consumer in 2014[1]—an unprecedented influence by an already powerful nation. Across the ocean in vibrant cities of Accra, Lagos, Kampala, and Nairobi, countless 20-something Africans carry iPhones to connect with friends and family on Facebook. Yet, the combined market capitalization of Apple and Facebook is approximately US$ 825Billion (as of April 28, 2016) – an astounding 47% of Sub-Saharan Africa’s total Gross Domestic Product (GDP). The world has changed!
For Nigeria, what do these fast-evolving and global events mean?
Firstly, it means being Africa’s largest economy in GDP terms only is merely symbolic without strong diversification, economic sophistication, and widely-accessible infrastructure; deeper reflections and systemic changes are required for inclusive and sustainable economic growth—emphasis on inclusiveness and sustainable growth. For example, Nigeria still trails South Africa in key infrastructure, GNI per capita, and quality investments —few indicators that make South Africa an upper-middle-income economy. Nigeria must embrace ‘new-thinking’ for the benchmarks of economic success by solving complex socioeconomic issues like affordable housing, modern public transportation system, high-quality healthcare, and an equitable justice system etc. For a start, Nigeria must support and deepen the Buhari Administration’s ongoing and commendable multilayered restructuring: hard and simultaneous efforts to redefine Nigeria’s image on the international stage and economic restructuring. The biggest lift will come from bold policies and ideas that foster local innovations and Nigerian-led investments of large infrastructure.
The Buhari administration has undoubtedly shown tremendous fortitude to navigate the multifaceted socioeconomic and sociopolitical challenges that fiercely vie for dwindling oil revenues. The unbundling efforts of the Nigerian National Petroleum Corporation (NNPC), systemic realignments of the power sector (e.g., power mix, gas master plan, and infrastructure), and recently signed US$ 6B Chinese loan agreements are important milestones. These achievements reinforce the mindset of an administration that is solution-driven and eager to apply bold ideas to unprecedented problems. Yet, there is no bolder idea than to tackle Nigeria’s infrastructure deficit head-on. And for this bold action, Nigeria is unlikely to deliver impactful and broad infrastructure solely from public spending; private infrastructure investments (i.e., infrastructure investments by the private sector) co-led by an infrastructure bank is essential to coordinate global capital inflows and technical expertise.
Why an infrastructure bank?
Today, there are few and fragmented institutions that facilitate private infrastructure investments, but Nigeria is in dire need of an integrated, impactful, and well-capitalized infrastructure bank with semblance to a Development Financial Institution (DFI). The country needs a world-class infrastructure bank to: (1) Lead early-stage investments and development in private infrastructure (e.g., expedite project development cycles), (2) Lead, co-lead or structure infrastructure finance and credit enhancements, (3) Pioneer new ‘exit platforms’ and post-development frameworks. These three (3) starting goals should enormously streamline the systemic challenges of private infrastructure investments and complement government spending.
Infrastructure—soft and hard—in macroeconomic terms represents the physical structures and institutions that form a nation and shape the economy. But in the 21st century, infrastructure is more than an economic indicator on fancy DFI reports or eloquent talking points at London or Washington summits—in this century, modern infrastructure is imperative for global competitiveness, economic growth and power, and public safety. Hard infrastructure should still be about Nigeria’s plan on modern rail networks that link Lagos to the heart of the country; Lagos’ impressive infrastructure plans;12-lane interstate highways from Ogun to the East and North; affordable and clean tap-water in small-towns of the Middle-Belt; modern and safe aviation; and a vast pipeline network for gas-to-power and LPG, to name a few. Soft infrastructure is about access to modern and efficient institutions like nationwide healthcare systems, an equitable justice system for civil and criminal litigations, a transparent and sophisticated financial system, an educational system that nurtures bright minds; and broad efficient deliveries of government services.
On funding the aforementioned infrastructure, public spending and Public-Private Partnership (P3) models have proven susceptible to politics in the past than common-sense economics. Direct loans or Aid by foreign governments are inherently driven by national interests, and the plethora of global Funds with keen interests in African infrastructure are not interested in development finance.
In what seems like a paradox, the long and rigid development cycles for private infrastructure investments are often due to lack of infrastructure and reliable data. For example, Nigeria’s power opportunities are massive but project-sponsors have to spend considerable time, planning, and capital on systemic challenges. For new power-generation developers, a key systemic issue is contending with the availability of gas infrastructure (e.g., gas availability and processing, supply agreements, pipelines) to the power plants. For private investments in rail networks, there is no precedence in Nigeria for eminent domain, interstate concessions, and financial returns. Therefore, in raising capital, additional thresholds to the project plan may include local currency guarantees, strict credit guarantees or the participation of the Multilateral Investment Guarantee Agency (MIGA) to name a few – although, systemic problems for ‘power investments’ are being vigorously tackled by the Ministry of Power—the old perceptions linger. All these milestones are incredibly expensive and time-consuming for project developers; as everyday Nigerians hope for breakthroughs. Other infrastructure such as transportation, water, healthcare, and social infrastructure have similar systemic hurdles—including the high cost of capital from local commercial banks skewed to short-term funds—a mismatch funding model for infrastructure development.
Subsequently, a bold initiative like a well-established, managed, and funded “Infrastructure Bank” potentially has the capacity to bridge the gap: State-interests, DFI interests, and private capital requirements. The bank’s strategic participation should also bridge gaps through local liaisons with stakeholders, development finance, and local knowledge expertise.
Bankable Chart
Only Nigerian-led efforts, not foreign interests, will lead sustainable developments
There is broad consensus by politicians, academia, business class, and mainstream Nigerians that infrastructure development is the key to unlocking the nation’s potentials; however, the rancor has always been the ‘how-question’? Depending on the countless reports you may have read on infrastructure or by whom, Africa’s annual infrastructure gap is estimated to be approximately US$ 93B; the decades-old playbook of how to attract “foreign direct investments” from Europe and North America through lavish dinners, summits, and incentive-speeches are so foreign in a fast-changing environment—private investors are driven by returns and not social developments. The Dangote Group, Heirs Holdings, BUA Group, and Mike Adenuga’s companies among others have probably led more Nigerian investments than any single foreign investor in recent years. New serious and local consortia with proven capacity should be engaged and encouraged, as they are likely to exemplify longer term commitments than foreign interests.
Housing alone is potentially bigger than oil
According to industry reports, there are at least 16million housing deficits in Nigeria. At a conservative average cost of N 5M per unit with 10% yearly target, Nigeria needs an annual investment of N 8Trillion (US$40B[2]) – a figure that is larger than Nigeria’s projected average oil revenues of US$ 19.4B[3] in 2016. Yet, if two of America’s leading Global Asset Managers with combined assets under management (AUM) of US$ 517B were to invest in housing this year, there would be systemic challenges in this fragmented industry. For example, if an investment group chooses to invest US$ 2B in affordable housing, it will still be difficult without a secondary mortgage market for average Nigerians to purchase homes in big cities; however, mortgage securitization, investments from institutional investors, and market consolidation can foster continuous liquidity through an infrastructure bank.
There are several other viable and impactful ideas with proven capacity to create millions of good-paying jobs for middle-class Nigerians; however, these projects are stuck in local bureaucracy (e.g., States) or in very rigid investment processes of American and European investors: a bloc that is still the largest source of private infrastructure investments in Africa. Several of these ‘Western investors’ with valid justifications, implicitly operate with longer development cycles for large infrastructure funding in Africa—cycles that conflict with most investment exit-cycles. That simply means: without the resources of Aliko Dangote or his ilk with access to DFIs, qualified and competent project developers of power or 20km rail projects should expect to reach financial close in 2021 or 2023. In 5years, the fundamentals of any project can drastically change.
Development Cycle
Figure 1: High overview of development milestones
Cenpower, Ghana’s first Greenfield Independent Power Plant (IPP) received wide acclaim for an unprecedented US$ 900M financial close; yet, the journey to the celebratory headlines was long and must have required sheer fortitude to endure the painstaking process to financial close. Supposedly, an early-stage and independent investor officially began the development phase for Cenpower in 2005; the Africa Finance Corporation (AFC) took over in 2010 and the project closed in 2014. For some context, London’s impressive £14.8B 42km Crossrail project will commence operations on an 11-year development cycle—a 9-year project development cycle to financial close for much-needed power-generation deals is an unsustainable path for Africa’s development future!
As Nigeria embarks on the largest infrastructure development in over a decade, the private-sector’s deep expertise and networks should be fully engaged for maximum results. The Nigerian government should earmark public funds to ‘de-risk’ and facilitate large private deals through a new ‘infrastructure bank’.
With the creation of an infrastructure bank that partners with key global stakeholders (e.g., IFC, ICBC, OPIC, PIDG, and Wall Street); the new infrastructure bank can use its balance sheet, credibility, and scale to lead early-stage investments to significantly cut project development cycles. The bank could co-invest equity and structure guarantees for Greenfields with no African precedence. The bank can pay for broad and expensive studies on rail infrastructure, water, housing; and partner with large debt providers to reduce inherent project risk for investors.
Notably, Asian emerging economies, mainly China, built large infrastructure by looking inward and betting big with less reliance on rigid foreign investment frameworks. The formation of strategic entities such as the China Development Bank, Industrial and Commercial Bank of China (ICBC), and engineering counterparts have fostered China’s rise. Nigeria can do the same.
In Conclusion
Africa’s future is very bright, and no country is best positioned to lead that great future than Nigeria. During America’s Great Depression of the 1930s, President Franklin D. Roosevelt took a bold and ambitious step to rebuild through the Work Progress Administration (WPA) initiative. “The WPA built, improved or renovated 39,370 schools; 2,550 hospitals; 1,074 libraries; 2,700 firehouses; 15,100 auditoriums, gymnasiums and recreational buildings; 1,050 airports, 500 water treatment plants, 12,800 playgrounds, 900 swimming pools; 1,200 skating rinks, plus many other structures. It also dug more than 1,000 tunnels; surfaced 639,000 miles of roads and installed nearly 1 million miles of sidewalks, curbs and street lighting, in addition to tens of thousands of viaducts, culverts and roadside drainage ditches” (Stone, 2014).
This is the defining moment for our country and our people – our time to rebuild. Our people with sheer creativity and not oil rigs, built Nollywood that shines brightly into millions of homes in Europe, America, and Africa. Our people, whose determination puts a Nigerian in every part of the world with remittances that rival foreign aid; our industrious people, whose resilience and hope amidst seemingly hopeless life events have raised world-class Lawyers, Doctors, Nobel Laureates, and business moguls. Our incredible people have built over one million homes in Lagos without mortgages. Our people, whose hustle and street-smarts have built historic Balogun market, Alaba, Onitsha, and Kaduna commodities centers without oil. For it is one of our people, Aliko Dangote, who first became Africa’s richest man without a producing oil block.
The tremendous achievements of Nigerians in the diaspora: in business, civic society, politics, and healthcare, reinforce the notion of Nigerian resilience and hard work. With access to developed infrastructure, Nigerians can achieve any ambition with collective efforts and common purpose. For our common purpose and shared values are far greater than our subtle differences.
Let this time and defining moment be our time – the time we finally solved the complex socioeconomic problems that have long beleaguered a generation. Let this be the time that Nigerians of all walks of life went to work with shared responsibility to build our own chains of organized retail; our own world-class medical centers and theme parks; our own modern rail networks and skyscrapers that line the skies of Port Harcourt through Calabar to Lagos; and let this be the time, we finally solve the problems of systemic corruption, government that works for all, and create uninterrupted power!
Let this be the moment we end the strife of ethnic and religious divides – and the moment we will finally rise to become Africa’s giant through bold and giant strides! Before oil, Nigeria led Africa with prestige and dignity; let us lead again with lasting foundations of infrastructure to maximize our highest potential.
Dare J. is a Principal of an infrastructure finance and development Co. contact info: Djoincorp@gmail.com
References
U.S. Energy Information Administration. (2014). Total Petroleum and Other Liquids Production – 2014. Retrieved from http://www.eia.gov/beta/international/
Stone, Andrea. (2014). When America Invested in Infrastructure, These Beautiful Landmarks Were the Result. The Smithsonian. Retrieved from http://www.smithsonianmag.com/history/when-america-invested-infrastructure-these-beautiful-landmarks-were-result-180953570/?no-ist
[1] According to 2014 U.S. Energy Information Administration
Africa needs between $60 and $70 billion yearly to provide infrastructure, the African Development Bank (AfDB) has said.
AfDB President Dr Akinwumi Adesina spoke at the first Global Infrastructure Forum in Washington last weekend.
He said: “If we don’t fix Africa’s infrastructure financing gap, we will continue to take two percentage points off Africa’s annual growth rates. And we cannot allow that to happen.’’
At a panel with the heads of nine other Multilateral Development Banks and the chair of the G24, Adesina said: “The funding that we in the MDBs can provide is large – but above all it is our role to leverage further funds. The funds on capital markets which are available for infrastructure far exceed what we have: in Africa, we will leverage the continent’s pension funds, its sovereign wealth funds and its private equity funds, which we estimate at some $520 billion. I am convinced that the future of Africa lies inside Africa – using African resources, and utilising African markets.”
The Forum titled: ‘Spending more, spending better’ – was introduced by World Bank President Jim Kim and United Nations Secretary-General Ban Ki-moon.
He welcomed the two new MDBs in the year: the Asian Infrastructure Investment Bank and the BRICS New Development Bank.
“In Addis Ababa last year,” he said, “the MDBs were charged with finding ways to turn ‘billions into trillions’ to finance the world’s development needs. And yet our own funding has gone down – from $112 billion in 2014 to $83 billion in 2015.”
“I may be the colourful one,” said Ban Ki-moon, “but you (the heads of the MDBs) are the powerful ones. You have the money to deliver on our policies.”
Adesina repeated that the core of the development challenge in Africa is the energy challenge. “With 650 million Africans without electricity, we have to light up and power Africa.” He explained how a further US $12-billion AfDB investment in energy over the next five years is expected to unlock an additional US $40-50 billion in funding from the private sector.
He pointed to the role of the Africa50 Fund in preparing bankable infrastructure projects and unlocking untapped African resources.
He urged other MDBs to innovate in the balance sheet management, after the recent exposure exchange between the AfDB, Inter-American Development Bank (IADB) and the International Bank for Reconstruction and Development (IBRD), which has freed up some US $10 billion for extra infrastructure lending for the AfDB.
A sociopolitical organisation, The Progressives Solidarity Forum (PSF), has expressed concern about the state of infrastructure in Nigeria.
According to a press statement signed by its leader, Dr Ibrahim Emokpaire, the group observed that the state of a bridge in Kano which has since gone viral on the social media is deplorable.
The group said that while investigating the state of government infrastructure in Kano, it observed that most of the bridges in the state are not properly managed.
During an assessment, the forum discovered that the particular bridge located at Tamburawa, which linked the two main northern commercial cities of Kano and Kaduna, was constructed years ago. They also discovered that the previous Kano State government under Alhaji Rabiu Kwankwaso made efforts to restore the bridge by ordering a stoppage of dredging and sand speculators. “When Alhaji Rabiu Kwankwaso came in as the Kano State governor in 2011, he personally visited the site and set up a high-powered committee drawn from the state’s Ministry of Works and Housing and the Federal Ministry of Works to analyse the situation and advise him accordingly. The result was what led to the banning of the activities of sand collectors within a span of about 200 meters from all bridges in the state.”
The forum wondered why nothing had been done since the last administration left the office.
Lamenting the impact that the bridge could have on the socioeconomic situation of the two states, northern Nigeria and the whole country at large.
West African Institute for Financial and Economic Management Director-General Prof. Akpan Hogan Ekpo has urged the Federal Government to invest in infrastructure to develop the economy.
He spoke at the Inaugural Lecture of Centre for Financial Journalism at the Civic Centre, Lagos.
Prof. Ekpo, who delivered the lecture titled: “The Nigerian Economy in Distress; Policy Choices for Buhari’s Administration”, said investment in infrastructure would help the nation to survive the economic hardship facing it.
“If the Federal Government would invest most especially in power, even if it is 15 hours power supply that we have in the country, we will be able to enhance growth and generate jobs,” he said.
He urged the Federal Government to create employment by hiring more young Nigerians into the police, immigration and customs among other agencies.
Prof. Ekpo urged the government to work towards changing the structure of the economy to industrialise the country and enable it begin manufacturing for exports.
“Once we are able to manufacture for exports, the value of our currency will be strengthened,” he said.
Lagos State Commissioner for Information and Strategy Mr. Steve Ayorinde, who was represented by the Ministry’s Director of Public Affairs, Mrs. Tolu Oladapo, noted that people must be sensitised to change their mentality and adopt financial integrity to enable the country survive its financial turbulence.
Dearth of infrastructure will affect Nigeria’s projection of hitting 20 megawatts (Mw) of electricity generation, the Chief Executive Officer, Enugu Electricity Distribution Company (EDEC), Rob Dickerman, has said.
Dickerman, who stated this at a forum in Lagos, said getting the projected megawatts requires huge funds, as well as other infrastructure, such as gas network, strong turbines and policies, among others.
He said about $40billion is required to produce 20,000Mw, arguing that the inability of the Federal Government to provide infrastructure for the power plants would make the plan unrealisable.
The Eko Disco chief, who praised the deregulation of the gas sector, said it was encouraging that stakeholders in the energy value chain are buying gas at varying prices in line with the competitive gas prices fixed by the government a few years ago.
He said: “Though prices of gas have been fixed at varying market induced rates by the government, there is need to deregulate the gas sector fully. The government should remove its hands from issues, such as fixing and controlling prices of gas. It should allow market forces to determine the growth of the gas sub-sector.
“When turbine owners are able to access gas at prices they are comfortable with, it would not be difficult getting the product to the plants, after undesirable issues such as pipeline vandalism and others have been addressed.’’
Dickerman said the country needs to build the Nigerian National Liquefied Gas (NLNG) domestic system, if it wants to make gas available for indigenous users.
The industry had generated about 5,000Mw of electricity in February before it went down to a little over 2,000 Mw of electricity few days ago. Currently, the sector is generating 4,200Mw.
The House of Representatives has mandated its committees on Pensions, Finance and Capital Market institutions to interface with the Nigerian Pensions Commission (PenCom) and other stakeholders on the viability of investing part of the N5trillion idle pension funds in infrastructural facilities.
The resolution of the House was an offshoot of a motion sponsored by a member, Yusuf Tajudeen, yesterday.
The motion was passed with dissent from some members.
While arguing the motion, Tajudeen said there is growing concern over infrastructural decay in all sectors of the country as a result of neglect, ineptitude and lack of planning by successive governments.
He said the dearth of infrastructure is having far-reaching consequences on the economy of the country.
He said: “In over one decade of the implementation of the Pension Reform Act, the National Pensions Commission has accumulated about N5 trillion which is mainly in the vaults of commercial banks as free funds characterised by low investment returns and sharp practices by various Pension Funds Administrators (PFAs).”
According to him, in most countries in Europe, Asia and America, pensions funds are usually invested in the provision of infrastructure as a means to regenerate the funds, grow the economy, sustain meaningful development and met the needs of the citizenry.
He expressed concern that the consequences of taking offshore loans and facilities to address the infrastructure needs of Nigeria will, in the long run, bring colossal damage to the economy.
“The huge infrastructural deficit in all sectors of Nigeria’s economy cannot be achieved through budgetary allocations alone, thus, if no concrete and pro-active investment strategies are put in place to comprehensively address these infrastructural challenges, the nation may be thrown into deeper economic crisis,” he said.
However, Hon. Pally Iriase and Hon. Lawal (Yobe North/South) sounded a note of caution on the issue.
Iriase said there is need to be careful so that wrong decisions that would be regretted in the future would not be made on the issue.
Lawal said members should take cognisance of the fact that already, there is over N80 billion non-performing loans problem in the country and it would be sad if the pension fund becomes a part of that.
According to him, there might be a scenario in which the retirement benefits of pensioners may not be paid as in the past because of bad investment decisions.
