President Bola Tinubu unveiled on Monday an infrastructure plan that targets an initial take-off fund of N20 trillion.
The Renewed Hope Infrastructure Fund is targeted at closing Nigeria’s $878 billion infrastructure gap by deploying as much as $35 billion yearly up till 2040.
Zacch Adedeji, chairman of the Federal Inland Revenue Service (FIRS), while speaking with State House journalists after the meeting of the Federal Executive Council FEC, said: “Nigeria’s huge infrastructure deficit requires that the government think outside the box, with the Renewed Hope Infrastructure Fund serving as a catalyst to drive the infrastructure development.”
During the administration of Tinubu’s predecessor, Muhammadu Buhari, the Presidential Infrastructure Development Fund (PIDF) was established, with the National Sovereign Wealth Authority playing a vital role.
The PIDF helped in the realisation of critical projects, such as the Second Niger Bridge and the Lagos-Ibadan Expressway.
The initiative however faced funding constraints as well as bureaucratic and institutional challenges, leading to delays in project execution.
Adedeji, the FIRS boss, said this new initiative will expand the PIDF to accelerate project execution, allow investment in potential sectors such as energy, agriculture, and solid minerals.
It will serve as a special purpose vehicle to drive investment in infrastructure, such as the coastal roads, rail, road and airports.
“The key focus will be on road, rail, agriculture, sectors. We believe that the President will launch this after a supplementary budget has been passed. The ultimate aim is to help boost our internal revenue mobilisation” he said.
Jude Chiemeka, acting chief executive officer of Nigerian Exchange Limited, had at a recent event said Nigeria’s infrastructure deficit, amounting to 30 percent of its Gross Domestic Product falls short of the international benchmark of 70 percent set by the World Bank.
Speaking on ‘Infrastructure Funding via Capital Market Instruments’, he said robust infrastructure was necessary to grow an economy and improve the quality of life.
When Babatunde Fashola was the minister of works, he put the nation’s infrastructure deficit at $2.3 trillion.
Speaking at the Julius Berger Nigeria Plc’s Luminary Soiree dinner in Lagos, Fashola referred to the National Infrastructure Master Plan projecting an estimated investment requirement of $2.3 trillion over the next 21 years (2020-2043) to modernise and expand Nigeria’s infrastructure.
Bayo Onanuga, special adviser to the President on information and strategy, said: “These challenges are what President Bola Ahmed Tinubu’s Renewed Hope Infrastructure Development Fund seeks to overcome.
“As conceived, it is a game-changing, innovative and transformative Fund that will drive economic growth in road, rail construction, agriculture, aviation, education, health, energy and technology. It will provide the elixir for critical national projects that will accelerate infrastructure and economic development in all parts of the country.
“With eyes on raising N20 trillion, about $14 billion take-off capital, the Fund will support projects that will promote growth, and enhance local value-addition through backward, forward and parallel linkages.”
The President is also eyeing to use the initiative to drive employment, as opportunities will be created with the deployment of massive construction activities, across the various sectors
A core focus of the Fund would also be to enhance the agricultural value chain to boost food security, by fortifying agricultural infrastructure. It would ensure that post-harvest losses are reduced and food supply chains strengthened, with the opening up of transportation, in roads, rail and waterways, including major seaports.
Among the projects being targeted are major road networks, such as the Lagos-Calabar Coastal Highway, Sokoto-Badagry Expressway, Lagos-Kano and Eastern Rail Lines. Ports and aviation facilities would be modernised.
The Fund is also designed to cast its net for investment capital wider than the PIDF, because, rather than rely solely on the Sovereign Investment Authority to fund projects, the fund will target private sector capital.
It targets pension funds, concessionary loans, insurance companies, sovereign wealth funds, private sector arms of multilateral development institutions, and bilateral private sector investors.
Other financing sources are individual investors, including Nigerians in the diaspora, endowments and equity funds.
At the FEC meeting on Monday, where the Fund was first tabled before members prior to its approval, Tinubu explained the rationale for its conception.
He said the Fund, which will be managed by a director-general, will be domiciled in the Presidency. It will cut through bureaucratic bottlenecks that usually delay implementation of good projects.
Tinubu cited the Lagos Metropolitan Area Transport Authority, which he conceived during his tenure as Lagos governor in 2004, and how the agency midwifed two rail lines and executed some of the important road networks in the metropolis.
Many members of the council applauded the initiative after it was presented by Adedeji, the FIRS boss.
“President Tinubu is desirous of bequeathing a legacy of socially and economically impactful policies, such as student loans, social security for the unemployed and consumer credit,” Onanuga said.
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