$250bn Needed For Infrastructure Development - FG

The Federal Government says the nation needs $25bn annually, for the next 10 years, to develop its infrastructure to a sustainable level.

Vice President Yemi Osinbajo stated this at the Aso Rock Presidential Villa in Abuja on Thursday during a knowledge-sharing forum on Public Private Partnership jointly organised by the African Development Bank Group and the Ministry of Finance.

He said: "It is estimated that Nigeria requires about $25billion annually for the next 10 years to grow its infrastructure to sustainable levels. It is obvious that this cannot be funded entirely by the public sector which brings the Public-Private Partnerships model to the forefront of our considerations."

The vice president said the National Infrastructure Master Plan put the country's current infrastructure stock at between 20 and 25 percent of the Gross Domestic Product (GDP).

Represented by the Special Adviser to the President on Economic Matters Dr Adeyemi Dipeolu, Osinbajo noted that this was below the global benchmark of 70 percent.

According to him, Nigeria would witness growth if there were substantial investments in power, railways, ports, telecommunications, airports, roads, dams, housing, bridges, airports, housing and facilities.

Osinbajo, who said that was why the present administration had prioritised investment in infrastructure, recalled: "In the 2016 budget, government has proposed to spend N1.84trn on capital projects, amounting to about 30% of the entire budget. Even though this is unprecedented in recent times, there is a realisation that this figure is still way below what the country should ideally be investing in infrastructure."

The vice president explained that the government was considering public-private partnership in infrastructure development owing to shortage of funds.

He, however, listed its benefits as including a more efficient procurement regime, rigorous analysis and market testing of costs as well as more efficient operation and maintenance of infrastructure.

Speaking further, the vice president stressed that using pension funds for infrastructure development was risky.

Osinbajo stated: "closely related issue is whether we have the appropriate framework to enable the use of our very large and growing public pension assets estimated at about N5.3 trillion for the provision of infrastructure without putting these assets at risk."

Finance Minister Kemi Adeosun said in view of the nation's infrastructural deficit, it had become imperative for the Federal Government to partner with the private sector.