Bankers C’ttee to focus on infrastructure development in 2022 - CBN

The Bankers Committee will in 2022 be focusing on supporting the Central Bank of Nigeria (CBN) and the government to reduce the level of infrastructure deficits in the country, Godwin Emefiele, the CBN governor said on Wednesday.

The move is based on the realisation that there is increasingly limited fiscal space to fund capital projects.

Early in the year, President Muhammadu Buhari had given approval for the establishment of the N15 trillion Infrastructure Company (Infraco Plc), a world-class infrastructure development vehicle wholly focused on Nigeria.

Emefiele, who addressed journalists at the end of the two-day annual bankers’ committee retreat in Lagos, said the board of the Infraco has been constituted with the managing director and four assets managers appointed.

“As we speak, the Infraco is already working on three major infrastructure projects in the country – the Abuja Kano road, the 2nd Niger Brigde, and the Lagos-Ibadan Expressway,” Emefiele said.

He added that “the Federal Government approached us to provide some kind of bridge funding. The bridge funding is almost about N170 billion and we provided it so that those projects can move on with funding.

“The entire scope of those three projects I’m told is slightly above N1 trillion but the numbers are being worked on. And I believe by the time the asset managers effectively come on board, the details of those projects and the remaining aspects of those funding would be coming in through debt and that is where the asset managers would come in with the entire scope and then we would know the detailed cost of those three projects,” Emefiele explained.

The CBN governor said N1 trillion of the N15 trillion equity is being contributed by the CBN, African Finance Corporation, Nigerian Sovereign Investment Authority (NSIA). The remaining N14 trillion, he added would be accessed from debt market.

“And I must say that we are happy here that these are substantially going to be naira funding. The banks have a large pool of funds, the pension administrators have a large pool of funds and we are reasonably optimistic that more than 50 percent or two-third of this money is going to be raised locally. Before we begin to think about accessing international finance, we would try as much as possible to limit debt for foreign currencies particularly knowing that some of these projects and revenues are going to be generated with local currency. Where foreign currencies are needed, we will also take those and then be able to use them,” he said.

Emefiele admitted that within the Nigerian financial system, there’s a lot of idle capital that can be channeled to INFRACO as it was set up to give comfort to investors especially the local investors to put their funds in these projects.

“This is a brilliant alternative financing methodology that has been brought up and we seek to really look into this. It intends to help government and private sector to raise finance, without necessarily encumbering the balance sheet of the Federal Government,” he said.

The bankers committee also took on the issue of export, looking at issues that are impeding the ease of export in Nigeria.

“We listened to some exporters who lamented the problems they go through in conducting their export activities and the bankers committee is saying that one way that we can deepen FX revenue in the country is for us to encourage and aggressively support exporters. It is not just about providing them with finance which we are committed to, but also the fact that we should do everything possible and the CBN is engaging the various agencies of the government to see what we can do to make it easy for people to conduct their export activities,” Emefiele said.