The Managing Director of Dutum Company Limited, Mr. Temitope Runsewe, has lauded the proposed CBN (Central Bank of Nigeria) N15trillion Infrastructure Fund saying the opportunities for the use of private capital to support infrastructure investment in critical sectors of the economy comes with enormous benefits.
Mr. Runsewe noted that while most Nigerians might look solely to the government regarding public infrastructure funding, numerous examples exist globally that point to the benefits of involving private capital in infrastructural development.
Various stakeholders have in recent times pointed out the huge financial demand associated with Nigeria’s infrastructural challenges. While addressing a meeting in July, Mr. Boss Mustapha, the Secretary to the government of the federation, noted that Nigeria’s infrastructural deficit would require at least $150bn annually to fix.
Credit rating firm Moody’s, in a 2020 research announcement, also projected that Nigeria would require about $3trn over the next 30 years to solve its infrastructure issues. According to the firm, “Financial guarantors, multilateral development banks, and local institutional investors will be important in helping finance infrastructure development.”
As frightening as this submission might be, the effects of unstable power supply, decrepit public infrastructure, and inadequate social amenities are a reality most Nigerians are all too familiar with. While the government has ramped up infrastructural projects such as railways and roads across Nigeria recently, studies show that Nigeria’s low GDP numbers are closely linked to inadequate infrastructure delivery.
Establishing a link between better infrastructure and economic growth, Runsewe said: “Our greatest challenge with economic growth in Nigeria is the glaring infrastructure deficit, which the government alone cannot fix. We must involve private sector capital in the mix to ensure that the economic potential of the country is improved by providing the roads, power, and other public facilities required in a growing economy.”
CBN N15trillion Infrastructure Fund which will be launched this October is expected to address the challenge of infrastructure deficit in the country by largely utilizing private sector capital to support infrastructure investment according to Mr. Godwin Emefiele, the Central Bank Governor. InfraCorp PLC, as the fund is also called, is a brainchild of the CBN with support from the African Finance Corporation and the Nigerian Sovereign Investment Authority.
Speaking on what impact the fund would have on the Nigerian economy, Mr. Temitope Runsewe said: “Working in the construction industry over the years, I have seen up close the challenges faced by both national and sub-national governments to meet the infrastructural needs of citizens. What InfraCorp provides is not just the necessary funding to support the government in bridging the infrastructure deficit, it also opens up opportunities to create more jobs in the construction industry and improve the skill level of professionals.”
“Everyone can attest to the fact that the level of excellence required by the private sector is much higher than what obtains in the public sector. What this means is that we will reduce wastage to the minimum and optimize service delivery. We might end up saving as much as N2trn annually by opening up public infrastructure delivery to global best practices, and this will mean more resources will be available for the government to improve education and healthcare delivery among other things” he added.