The African Development Bank (AfDB) says Nigeria loses about four percent of her Gross Domestic Product growth annually because of poor infrastructure.
This amounts to $17.1 billion yearly using the 2020 GDP figures.
The AfDB President, Dr. Akinwumi Adesina, said this as a panelist at an investors Webinar to showcase the investment opportunities from the Federal Government’s reform and privatization.
Nigeria’s infrastructure deficit he lamented “is one of the main constraints to industrial development and national competitiveness. Estimates indicate that Nigeria’s infrastructure constraints cost the country around four percent of its yearly Gross Domestic Product growth”.
Given the huge amounts needed to bridge the country’s infrastructure gap, which is about $100billion annually for the next 30 years, he said time has come to create an enabling environment for Public-Private Partnerships to close Nigeria’s infrastructure gap.
To make this a reality, the AfDB has offered to work with the Nigerian government, and other key stakeholders, to implement bold and innovative approaches that will drive private sector participation and investments in the economy.
The AfDB President said it will work with “like-minded” development partners and financial institutions to deploy a suite of instruments, including direct lending, equity participation, de-risking facilities, and the platform of the Africa Investment Forum platform to get more private sector investments into the economy.
He noted that “the construction of the Lagos-Abidjan highway which is expected to commence from next year would unlock 85 percent of trade within the ECOWAS sub-region”.
Adesina stated that the AfDB is “working closely with the ECOWAS Commission and the concerned countries to finalize the feasibility studies for the landmark Abidjan-Lagos Highway.
He also submitted that while “the federal government had spearheaded various reforms in the banking sector that have enhanced the resilience of the financial system, there is need to stay the course in completing the bold reforms initiated to restructure the energy sector”.
Represented by the Director-General, AfDB Group, Nigeria Country Department, Mr. Lamin Barrow, Adesina said “this is why the AfDB is supporting the government’s efforts in addressing the infrastructure deficit in Nigeria through the development of both national and regional infrastructure”.
In the energy sector, he said the AfBD’s support will help improve access and reliability of electricity supply by attracting private sector participation.
According to him, the $256million and $200million financing respectively for the Nigeria Transmission Expansion Project (NTEP-1) and the Nigerian Electrification Project (NEP) respectively, will contribute to strengthening of the transmission network and promote off-grid solutions.
In the transport sector, he explained that the bank’s $430million support for the Enugu-Bamenda Road linking Nigeria and Cameroun, expected to be completed this year, will provide a gateway for enhanced trade between West Africa and Central Africa.
“We are also supporting the rollout of new flagship programmes such as the Special Agro-Industrial Processing Zones (SAPZs) and Nigeria Innovation Programme (Digital Nigeria) to unleash the potential of the economy. These will be complemented by enhanced policy dialogue with a view to consolidate Nigeria’s strategic position as the bulwark for the regional economy.”
Attracting private sector participation is critical for mobilizing investment resources and ensuring sustainable operation and maintenance of public infrastructure assets.
To this end, the AfDB DG said governments should put in place adequate regulatory frameworks to treat infrastructure as an asset class and view privatisation as an opportunity to optimize underperforming assets.
“Privatisation and commercialisation of public enterprises should therefore be more than just a transaction but an institutionalized mechanism with a long-term perspective.
“They represent a new way of life/doing business to accelerate achievement of the SDGs, an inclusive society, and as tools for building dynamic and competitive economies,” he said.
Source: The Nation