Nigeria’s Federal Government is planning to create a $25 billion infrastructure fund that will be used to invest in the country’s transport and energy sectors, Reuters reported on Thursday.
The planned fund will be financed by several local and international multinational institutions including the International Finance Corporation (IMF), the African Development Bank (AfDB) and the Multilateral Credit Guarantee Agency (MIGA).
Laolu Akande, spokesperson for Vice President Yemi Osinbajo, said that other sovereign wealth funds had already indicated an interest in the fund, “which would be used to address the nation’s decaying road, rail and power infrastructures”.
Anastasia Daniel-Nwaobia, permanent secretary in the country’s Ministry of finance, had first hinted on the infrastructure fund during the World Bank and IMF meeting in Lima, Peru, The Sun reported on Oct. 18.
“We held meetings with the IMF, AfDB and MIGA who are already participating in some of the projects we are executing in the country,” Daniel-Nwaobia said.
“And to meet the needs of Nigerians, the Federal Government is planning to set up an Infrastructure Fund and [they] have agreed to help us,” she added.
It is estimated that the West African nation of about 170 million people is faced with a $100 billion annual infrastructure funding gap. At present it can only meet less than half of this huge bill even if both private and public sector stakeholders pool together.
Even with the infrastructure fund, the Nigerian government will need to raise an extra $25 billion each year to effectively seal the gap.
Bolaji Balogun, chief executive at Chapel Hill Denham, estimates that the country needs 2.8 trillion naira ($14 billion) annually from the private sector to fund infrastructure projects.
The West African nation’s economy, the biggest on the continent, has been hammered this year by the fall in oil prices, its main export commodity that accounts for over 70 percent of government revenues, making it difficult for it to meet it development expenditures.
