Nigeria needs $100bn to fix infrastructure, says Works Minister

For the nation to fix the rot in her infrastructure, the Works Minister, Mr.Mike Onolememen, has canvassed $100billion investment for 10 years, even a financial expert has counselled the Federal Government to jumpstart economic growth with huge investment as oil slump continues.

According to the Minister, who disclosed this Thursday in Lagos at ‘A day dialogue on the Capital Market and the 2015 Federal Budget’ organised by the trio of Chartered Institute of Stockbrokers(CIS), Association of Stockbroking Houses of Nigeria(ASHON) and Association of Issuing Houses of Nigeria(AIHN), this is too much burden that the Federal Government cannot bear alone as provision of infrastructure is a capital-intensive process.

He lamented that non-availability of long-term funds, absence of risk sharing structure and a dearth of expertise to assist banks in infrastructure financing are some of the challenges hampering development efforts.

He, however, argued that the nation should look beyond traditional approaches for financing and borrow a leaf from some emerging economies to address those challenges.

His words: “The 48 countries in sub-Saharan Africa, with over 800 million people, has infrastructure challenges accounting for an average two per cent decline in economic growth per annum. To overcome the continent’s numerous challenges will require bridging infrastructure gap. Building more roads and rail systems will result in increased intra-continental trade and investment; just as increased power generation will enhance productivity of businesses, manufacturing and  to enable more people to work and contribute productively to the economy. Africa needs an estimated US$93 billion per annum to develop its infrastructure, with two-thirds required for new physical infrastructure  and one-third for maintenance & operations.

“Nigeria is not different and we need to improve our current seven per cent GDP on infrastructure, which is above the average for Sub-Saharan Africa, to about !2 per cent based on recent research. Nigeria needs an annual investment of US$10 billion per year over the next 10 years in order to reduce its infrastructure deficit; an amount the Federal Government cannot provide alone.As a catalyst for a new Nigerian economy and to address this challenges, we need to look beyond traditional approaches for financing and borrow a leaf from some emerging economies like India, Brazil and Malaysia.”

Meanwhile, the Federal Government has been  advised to invest massively now despite the slide in oil price to avoid social instability.

In his paper entitled: ‘The Capital Market and the 2015 Federal Budget’, one of the guest speakers, Mr Tola Mobolurin, said the government should find a way of  increasing investments in the economy as the decline in oil revenue would engender austerity measures that would retrenchment,  salary delay and eventually shrink household economy.

“Until our oil receipts translate  to where we can feel comfortable, salaries will not be paid; I don’t know how many people will save; I don’t know how many companies that will invest if government is not investing; government will cut down expenditure; there will be retrenchment and household economy will fall. We can not have sane and stable society if large percentage of the people can not earn a living.”

and the Chairman of NASD Plc,

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