FG moves to bridge $2.4trn infrastructure funding gap

The Federal Government will soon commence the implementation of a strategic investment master plan to bridge the country’s huge infrastructural funding gap estimated at $2.4 trillion within the next 30 years.

Saratu Umar, the executive secretary/chief executive officer (CEO), Nigerian Investment Promotion Commission (NIPC), disclosed this during a media roundtable organised by the agency as part of stakeholders’ sensitisation programme in Lagos. She said that infrastructure funding was a priority under the proposed Nigerian Investment Promotion Master Plan being developed by the commission to drive investments in critical sectors of the Nigerian economy, adding that the agency had already commenced stakeholders’ collaboration aimed at bridging the funding gap.

According to her, “Foreign direct investment (FDI) is widely acknowledged worldwide as the most useful and cheapest source of development finance, because it creates employment, ensures transfer of technology, conserves foreign reserves, ensures availability of quality goods and services, among others.

For this reason, the competition for FDI has been very stiff, particularly in recent years due to globalisation brought about by technology. “One of the strategies adopted by most countries to attract FDI is the establishment of Investment Promotion Agencies (IPAs), with over 170 IPAs worldwide competing to attract often limited FDI to their various countries. Nigeria needs over $2.8 trillion in infrastructure funding over the next 30 years, whereas the estimated budgetary provision will be about $45 billion. This leaves a huge shortfall of about $2.4 trillion.” She added that Nigeria received an average of $7.5 billion yearly and “if this is constant over the next 30 years, we would have only brought in $223 billion in FDI. If we compare this to the infrastructure investment requirement, we still have a huge gap. “Therefore, a massive FDI inflow is required to service the implementation of the various strategic master plans across critical sectors of the Nigerian economy.

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The implementation of the NIPC’s Investment Promotion Master Plan is being designed to address the sector-specific funding gaps.” As part of the new strategies to transform the agency to deliver on its mandate in line with global best practices, the NIPC is currently streamlining investment procedures to remove all bottlenecks in business legalisation procedures and other ongoing critical reforms.

She explained that “the NIPC is repositioning to bridge Nigeria’s infrastructure funding gap, estimated at $2.4 trillion over the next 30 years and if the commission is to achieve its purpose, there is the need for effective collaboration with stakeholders for mutually beneficial purposes.

“In this regard, we are reviewing our strategy concerning partnerships, image, investment targeting and client servicing in a coordinated fashion that facilitates steady and sustainable growth of FDI in Nigeria. “We have also set up an Investment Coordination Framework to improve the business climate, improve the ease of doing business and ensure policy consistency. This will help to enhance investors’ confidence in the Nigerian economy.”

The executive secretary noted that the agency had also streamlined its investment promotion drive through the promotion of country-specific and sector-specific investment opportunities in line with Nigeria’s investment priorities. “This is in addition to developing a structured and result-driven investment promotion calendar and certification of private organisations engaging in investment promotion activities,” she stated.

Speaking during the event, Tony Elumelu, the chairman, of Heirs Holdings, said Nigerians should support the ongoing efforts of the NIPC towards promoting the country’s hugely untapped investment opportunities to both local and global investors. He said, “I am here at this meeting as a representative of the investors’ community in Nigeria. Our country needs both local and foreign investments to achieve inclusive and sustainable economic growth and development.”