For Nigeria’s infrastructure to deliver the kind of economic productivity needed to advance the nation’s growth, the Federal Government needs $15 billion annually for the next five to six years to plug the infrastructural deficit.
This was disclosed by Mr. Adekunle Oyinloye, the Managing Director, Sifax Shipping Company Limited and former Chief Executive Officer, Infrastructure Bank Plc, during the 24th Annual Conference of the Chartered Institute of Stockbrokers.
At the event tagged ‘Infrastructure and deficit funding: Bridging the gap via the Nigerian capital market’, Oyinloye said Nigeria’s infrastructure sector has been underdeveloped for far too long, and his he claimed has limited access to social services and enormously increased cost of production and trade.
Oyinloye puts the current value of Nigeria’s infrastructure at about 35 percent of Gross Domestic Product (GDP), saying it was very low when compared to 70 percent for economies of the same size.
According to him, public infrastructure expenditure to GDP was 3.5 percent.
He said, “Infrastructure financing cannot be met through public resources alone as it will be crippling to the economy in the era of fiscal constraints. With the estimate that the country needs to fund about 18 per cent of its GDP on infrastructural development, it is important to start to look for alternative sources of financing to bridge the deficit.
“This financing is expected to come from local project sponsors, international project sponsors, local banks, international banks, local institutional Investors, international Institutional Investors and multilateral finance organisations.”
Oyinloye added that the financial market should be structured to play a more significant role in infrastructure development with bond issuances and a good regulatory environment encouraged to protect investors.
He said, “The government cannot be the sole provider of infrastructure projects. The regulators should restructure the capital markets to foster private partnerships to contribute towards the country’s development through funds mobilisation.
Source: Naija News