As the Central Bank of Nigeria (CBN) plans to launch a N15 trillion InfraCorp Plc., mostly private capital, to support investment in critical infrastructure, some stakeholders have insisted on proper planning, strategic contracting and judicious utilisation of the fund.
Governor of CBN, Godwin Emefiele, had said given the lingering deficits in the nation’s infrastructure, the fund was expected to have a multiplier effect on growth across critical sectors, especially power, to improve productivity and address the growing poverty for improved quality of life.
Although experts in the sector have agreed that massive investment in infrastructure was a step in the right direction, they stressed the need for proper and sustainable plans that would lead to the actualisation of projected goals.
A former President, Nigerian American Chamber of Commerce and Chairman, Tricontinental Group, Olabintan Famutimi, warned that even though the infrastructure deficits in the country remained worrisome and requires an urgent intervention, the country must tread wisely and ensure the fund is channeled into viable projects with economic benefits rather than politicising economic and business decisions.
According to him, examining the economic outlook of the projects and their multiplier effects on the nation are most important than raising fund to finance infrastructure.
He said: “We need infrastructure but it is more about which infrastructure government is working on, funding source and the conditions of the fund as well as the overall effect on the economy.”
A professor of economics at Babcock University, Segun Ajibola, noted that despite the growth in population, urbanisation and technological advancement, several hundreds of thousands of road network, rail lines, energy and power, water and other critical infrastructures were either inadequate or dilapidated.
Ajibola, a former President, Chartered Institute of Bankers of Nigeria (CIBN), urged the apex bank to introduce a framework for monitoring performance, which must be efficient and effective, adding that there must be shift from seeing intervention funds as free public funds if the infrastructural fund must achieve the desired goals.
He further advised that public, private partnership (PPP) would improve on the quality of delivery, performance and accountability, noting that such interventions were expected to berth with relatively generous terms and business-like template.
“Looking inwards in the manner being proposed by CBN may be helpful. But then, the framework must be right. I will recommend a private partnering via collaborative arrangement between local and foreign interests adjudged competent in providing such infrastructures.”
An expert at PWC, Habeeb Jaiyeola, noted that although infrastructure funds used globally for development of critical infrastructure guarantees constant returns on investment for investors, a critical element of the success of the funds remained adequate planning and strategic contracting.
According to him, with several infrastructure initiatives already being conceptualised within various sectors, the N15 trillion infrastructure fund should be administered to complement and align with the plans and projects.
“It is expected that the N15 trillion fund is channelled into critical infrastructure in the country that will open up sectors and markets as infrastructure challenges have been one of the major factors hindering the growth of some critical sectors in Nigeria,” he noted.