Nigeria’s infrastructural gap to gulp $3trn- Report
The infrastructural gap in Nigeria is a fall out of many years of neglects of incoming administrations not believing in continuity as every new government that comes in jettison all what their predecessor had started.
Most of the projects could be described as elephant project which is capable of eroding the resources of the state to the detriment of other sectors.
However, a recent report released has indicated that Nigeria needs $3tn to bridge infrastructure gap.
According to Global credit rating agency, Moody’s Investors Service, in its first report on the Nigerian infrastructure market obtained by Gentechnews, indicated that the infrastructure in Nigeria is behind other emerging market peers, with about $3tn needed over 30 years to close the gap.
The report explained that weak institutions and governance frameworks along with a low tax base are hindering infrastructure investment, while financially strained utilities are unable to invest in improvements.
Commenting on this development, the Vice President, Senior Analyst at Moody’s Investors Service, Kunal Govindia, maintained that the country had an infrastructure deficit, facing additional pressures from a rapidly growing population, while low government funding capacity and customer affordability has been weakened further by the COVID-19 pandemic and low oil prices.
The report clarified that the focus of infrastructure development had been within power, railways, roads, ports, and pipelines, adding that the trend was expected to continue with particular investment needed to address Nigeria’s electricity shortages.
“To this effect, Nigeria’s power sector could benefit from renewable energy like solar and wind, with financing also possible from green bonds,” the report said.
The rating agency comments on the budget constraints facing the country, noted that addressing this shortfall would require financing from the private sector, multilateral development institutions and other non-state investors.
“Financial guarantors, multilateral development banks and local institutional investors will be important in helping finance infrastructure development,” it concluded.
