Government to launch $25bn infrastructure fund aimed at raising money to build Nigeria

FINANCE minister Kemi Adeosun has announced plans to set up a $25bn infrastructure fund aimed at raising capital to bankroll the upgrading of Nigeria's dilapidated public structures including roads and schools.

 

Despite enjoying incessant growth with a rise in gross domestic product (GDP) of between 5% and 7% over the last 20 years, Nigeria's infrastructure remains very basic. Roads get waterlogged and impassable during the rainy season, schools are crumbling, hospitals are unfit for human habitation, while the railway network remains largely in the state it was when the British built it in 1912.

 

Even though the International Monetary Fund declared this week that Nigeria's GDP has ballooned to $1.1trn, the annual budget of $20bn still remains inadequate to fund infrastructural development. As much as 70% of Nigeria's budget goes towards meeting running costs, with little set aside for capital investments.

 

This prompted President Muhammadu Buhari to consider doubling the forthcoming budget to $40bn and it appears that the infrastructure fund is part of this programme. Speaking in Lagos during the inauguration of the Capital Market Master Plan Implementation Council, the National Investor Protection Fund and launch of the Corporate Governance Scorecard by the Securities and Exchange Commission, Ms Adeosun said the decision to set up the infrastructure fund is in recognition of the need to develop Nigeria.

 

She added: “In the current environment of significant revenue squeeze and other budgetary constraints, these investments will clearly not come from government coffers alone. We believe this is where the capital market can really make itself relevant by stepping in to close the funding gap, sop the government is already looking to set up a $25bn fund wholly dedicated to infrastructure investments.”

 

At the occasion, the minister challenged the capital market community too come up with other innovative ways of mobilising the funds needed to address the country’s infrastructure challenge. She added that an efficient and vibrant capital market was an indispensable feature of any modern economy, supplying affordable medium to long-term capital needed for growth.

 

“Nigeria needs and deserves a capital market that is characterised by high levels of liquidity, depth, breadth and sophistication to enable rapid socio-economic development. Going through the capital market master plan, it is heart-warming to note that this is the type of market you envision for our country and indeed, we desperately need one to tackle Nigeria’s biggest challenges of huge infrastructure deficit and unacceptable level of unemployment,” Ms Adeosun added.

 

She decried the fact that less than 3% of Nigerians were investing in the capital market and only 0.2% of the population were putting their money in mutual funds. According to Ms Adeosun, if the master plan is properly implemented, the country’s Nigeria's capital market will become Africa’s most efficient and globally competitive market.