Central Bank Chief Emefiele Says – $85Billion Infrastructure Investment Needed For Double Digit Growth

Central Bank Chief Emefiele Says - $85Billion Infrastructure Investment Needed For Double Digit Growth
Central Bank Chief Emefiele Says – $85Billion Infrastructure Investment Needed For Double-Digit Growth

 

 

 

 

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, declared that 35 trillion dollars (about 85 billion dollars) of investment in infrastructure is required for the economy to register double-digit growth.

However, he stated that given the scarcity of government revenue, it will be difficult to support such investments using only government funds.

The Nigerian economy recorded a growth of 0.51% in the first quarter of 2021 after a growth of 0.11% in the fourth quarter of 2020.

 

 

In a goodwill message that he delivered in a
Webinar on “Financing Public-Private Partnerships to Boost Infrastructure Delivery in Nigeria”, organized by the Bureau of Public Enterprises (BPE) in Abuja, on Thursday Emefiele noted that
the topic of the webinar was topical as a critical part of efforts to drive sustainable growth in the Nigerian economy.

 

 

The CBN governor, whose message was delivered by the bank’s deputy governor on economic policy, Dr. Kingsley Obiora, said that the COVID-19 pandemic had had an unprecedented impact on the Nigerian economy, adding that significant interventions by the monetary and fiscal authorities had provoked to come out of two recessions although the growth is silent.

 

 

 

He noted: “While this news is positive, growth is still well below our population growth of 2.7%. Therefore, it is imperative that we all work together to harness the growth potential of the Nigerian economy.

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“If we take into account the Nigerian Infrastructure Master Plan, we need about $ 35 trillion in investment to achieve double-digit growth. But given the scarcity of public revenue, which the Director-General of the BPE mentioned earlier, it will be difficult to support these investments using only government funds.

 

 

 

“Therefore, finding ways to leverage public-private partnerships has become very important and we are pleased to acknowledge that these partnerships have started in earnest and the Central Bank of Nigeria looks forward to continuing collaboration with the BPE to leverage these partnerships and ensure that significantly increase investment in our infrastructure. ”

 

 

In her keynote address, the Minister of Finance, Budget and National Planning, Dr. Zainab Shamsuna Ahmed, revealed that as of the 2021/2022 budget cycle, all infrastructure projects in Nigeria must be evaluated to determine the suitability of the Association. Public Private (APP) and compliance with the National Master Plan for Integrated Infrastructure by his ministry and the BPE before its inclusion in national budgets and subsequent acquisitions.

The minister, who is also vice-chairman of the National Privatization Council (NCP), said that “all these efforts are to ensure that PPPs take a central place in the procurement of infrastructure in Nigeria.”

 

 

The government, he said, is ready and willing to engage in dialogue and incorporate valuable input from stakeholders with a view to further strengthening Nigeria’s PPP framework.

She noted that the webinar was an opportunity to hear directly about the concerns and areas that participants would like the government to address in order to make the investment profitable and offer good value for money for the country as a whole.

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While soliciting the support and cooperation of public and private sector partners, local and foreign partners, financial institutions and other key stakeholders important to the successful implementation of the government’s new PPP policy directive, he said that the current administration was committed to developing the country’s infrastructure through PPP agreements.

In his remarks, the Director-General of BPE, Mr. Alex Okoh, said that in line with its new role in the administration of concessions programs of the Federal Government of Nigeria, the Office, in collaboration with the Federal Ministry of Finance, Budget and National Planning has developed a PPP project information tool that has been sent to all ministries, departments, and agencies (MDA) to capture all current and proposed infrastructure projects in the country.

 

 

 

“This will help document a portfolio of PPP projects in various sectors of the economy” and that several of the MDAs have already submitted their PPP Project Information Data and that the final date for submission is May 31, 2021 “Okoh revealed.

According to him, the Office would partner with the UK’s Nigerian Infrastructure Advisory Service (UKNIAF) to select projects to ensure that only those that are financially viable and economically viable are included in the “national portfolio of PPP projects” .

 

 

 

He indicated that the BPE also intends to establish a revolving Project Development Fund (PDF) for APP transactions, adding that the funds raised from the common fund would be used to facilitate the proper structuring of APP transactions.

Expressing the hope that financial institutions will support the initiative to increase the number of viable projects that could be successfully closed commercially and financially in the infrastructure space through PPPs, Okoh noted that considering the huge gap in the infrastructure stock in the country and amount Of the funding needed to close the gap, the role of private sector funding through PPPs has become very significant, hence the need to organize the webinar.