President Muhammadu Buhari recently disclosed that Nigeria needs $1.5 trillion over a 10-year period to bridge the nation’s infrastructure gap. President Buhari stated this at the high-level segment for Heads of States and Government at the recent 26th Conference of Parties (COP26) in Glasgow, Scotland. According to the President, Nigeria is ready for international investments in infrastructure development and has taken the expansion in infrastructure in critical sectors of the economy as one of the ways to support the administration’s promise to lift 100 Nigerians out of poverty by 2030.

It is to address the infrastructure deficit that the G7 nations have made elaborate plans to mobilise funds for infrastructure investment in low-and middle-income countries. Perhaps it is in the bid to boost infrastructure development that the Federal Executive Council (FEC) approved the reconstruction of 21 federal roads across the six geo-political zones by the Nigerian National Petroleum Corporation (NNPC). The decision was in line with Executive Order No.007 of 2019, cited as the Companies Income Tax (Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme).

Nine of the selected road projects are in North Central, three in North East, two in North West, three in South South and two in South West and South East, respectively. The 21 roads, which cover 1,804.6 kilometres, will be reconstructed at the cost of N621.2 billion.            

There is no doubt that Nigeria’s infrastructure gap is so glaring. Access to affordable and reliable infrastructure, including power, transportation, communication and clean water is a herculean task. At this critical time that many nations’ economies are reeling from the shocks of the COVID-19 pandemic and dwindling finances, a robust infrastructure development will lead to economic recovery. For Nigeria, the development of its infrastructure will enable it reap the immense benefits of the African Continental Free Trade Agreement (AfCFTA), which took effect in January, this year.                                    

To become a big player in the continental trade, good infrastructure is required. At the moment, the cost of bridging Nigeria’s infrastructure deficit is put at $100bilion annually. This is 189.77 per cent above the 2021 federal budget, projected at $34.51 billion, according to a recent report by one of the world’s reputed rating agency, Moody’s. In 2015, the total national infrastructure stock was estimated at only 35 per cent of the Gross Domestic Product (GDP).

Related News

What this means is that to bridge the infrastructure gap, Nigeria requires over $3trilion in the next 30 years. Considering the dilapidated nature of the nation’s infrastructure, the money may be higher than what is stated. Even at that, it will be daunting to get the stipulated amount.      

While there is a connection between infrastructure development and overall economic development of any nation, it will require strategic planning to get the huge amount needed to bridge the nation’s infrastructure gap. It will also require the political will to really diversify the economy, especially the non-oil sectors such as agriculture and solid minerals. A blend of public and private sector funding will be helpful. Even before the present economic downturn, commercial investors in Nigeria had started restricting their commitments to bankable projects because of low return on investments. The intervention on road infrastructure by entities such as the NNPC and Dangote Group is needed to reduce the burden and competing demands on government’s funds.                                      

Therefore, it is cheering that the Economic Recovery and Growth Plan (ERGP) of the Federal Government identifies critical sectors which require local and international investments. These include transportation, power sector, railways, waterways, the second Niger Bridge and Lagos-Ibadan expressway, Mambilla Hydropower plant, among other projects across the country. It is commendable that the newly established Infrastructure Corporation of Nigeria (InfraCo) will raise $40billion for projects, with seed capital of N1trillion from the Central Bank and the Nigeria Sovereign Investment Agency (NSIA) and Africa Finance Corporation (AFC).    

Despite these bold efforts, statistics show that about 80 per cent of Nigeria’s infrastructure projects fall within the feasibility and business planning stages. Therefore, for Nigeria to bridge the infrastructure gap and attract foreign investments that President Buhari alluded to in Glasgow, successive administrations in the country must show strong commitment in the execution of critical infrastructural projects, especially in healthcare, education, manufacturing, housing, agriculture and water resources.