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Nigeria requires N36tr yearly to close infrastructure gap

NIGERIA will require around N36 trillion per year for the next 30 years to address its massive infrastructural demands.

Proshare Economy has released a new research on Nigeria’s Economic Outlook 2022, which recognizes the need for investment in the infrastructure business (Infraco), the electricity value chain, aviation, seaports, and insecurity.

The report said with a seed capital of N1 trillion jointly contributed by the Central Bank of Nigeria (CBN), the Nigeria Sovereign Investment Authority (NSIA), and the African Development Bank (AfDB), the Infrastructure Company (Infraco) is expected to bring about private sector involvement to improve Nigeria’s infrastructure. The N15tr Infraco set up to bridge the nation’s infrastructure gap became operational in the third quarter of 2021.

Also, the report stated that the 24-hour Nigerian International Financial Centre (NIFC) is expected to act as an international gateway for capital and investment, adding that the NIFC would offer high-return-yielding investment opportunities in Nigeria to the world.

The Infrastructure Company (Infraco) is expected to bring private sector involvement to improve Nigeria’s infrastructure, according to the report, with a seed capital of N1 trillion contributed jointly by the Central Bank of Nigeria (CBN), the Nigeria Sovereign Investment Authority (NSIA), and the African Development Bank (AfDB). In the third quarter of 2021, the N15tr Infraco, which was established to fill the nation’s infrastructure shortage, became operating.

The report further stated that the Nigerian International Financial Centre (NIFC), which would be open 24 hours a day, will serve as an international gateway for capital and investment, and that the NIFC will provide the globe with high-yielding investment opportunities in Nigeria.

According to the research, the country will require N36 trillion per year for the next 30 years to close its infrastructure gap, according to the World Bank.

According to the electrical value chain, only 22% of the poorest households have access to electricity, while 82% of the wealthiest have power.

It stated: “The US$2.3bn Presidential Power Initiative (formerly the Nigerian Electrification Roadmap) which was launched in July 2019, was meant to see German company, Siemens AG, provide 25,000 megawatts (MW).

“However, two years after, the first phase of the project which should have brought the electricity grid to 7,000MW by the end of 2021 has yet to kick in. Nigeria’s electricity value chain is characterized by a power generation transmission mismatch. Despite the country’s more than 8,000MW of operational power-producing capacity, only an average of 4,500MW is received by end-users.

“World Bank stated in a recent report that Africa’s largest economy had the largest number of people without access to electricity in the world and that electricity subsidy benefited mainly richer households.”

The four major commercial airports – Lagos, Port Harcourt, Abuja, and Kano – are projected to operate more efficiently and economically through a concession arrangement, according to the Federal Government’s aviation sector strategy.

“The concession programme request for qualification stage (RFQ) was completed in October, while the Request for Proposal (RFP) is expected before the end of the year. The concession programme is expected to upgrade airport facilities bringing them to the level of international aviation hubs,” it stated.

It added that cargo clearance logistics have continued to be a substantial hindrance to the operation of business in Nigeria at the seaports.

Despite the implementation of the e-call up system (Eto) – which was designed to ease congestion along the port corridor by scheduling truck traffic – port operators claim the system is being sabotaged.

The research also underlined the negative impact of insecurity on the Nigerian economy, with bandits and kidnappers posing a huge threat to farmers in the North-West area.

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