The African Development Bank (AfDB) has joined the call for a critical role for publicprivate partnerships (PPPs), which is expected to play a role in unlocking the full potential of Nigeria’s economy towards realising $15 trillion yearly for investment in infrastructure post-COVID-19. President, African Development Bank (AfDB), Dr Akinwunmi Adesina, made this known in an interview with New Telegraph, saying that private sector should be given the desired incentives and tax rebates by government that will see PPP being aggressively accelerated to finance major infrastructure across Nigeria. Adesina explained that Nigeria’s institutional investors, especially the pension funds, should invest in infrastructure in the country as a yardstick for their contribution to push Nigeria’s economy to the next level.
In addition, he pointed out that financial innovations should be prioritised, as government alone cannot afford these huge financial costs anymore following macroeconomic challenges like uncertainty in the price of crude oil at the international market, which is seriously affecting accrued revenue earning and plummeting external reserves. The AfDB boss said: “Infrastructure is critical for unlocking the full potential of Nigeria’s economy. Nigeria will need $15 trillion a year for investment in infrastructure.
“Financial innovations should be prioritised as governments alone cannot afford these huge financial costs. The private sector should be given incentives to invest in infrastructure. “The Federal Government’s N15 trillion Infrastructure Fund is a good idea, so is the initiative for tax credits for private sector investment in infrastructure.
“To be sustainable and more efficient, public-private partnerships (PPPs) should be accelerated to finance major infrastructure across Nigeria. “Nigeria’s institutional investors, especially the pension funds, should invest in infrastructure. Governments can also implement ‘Infrastructure Asset recycling models, where existing infrastructure assets on government books can be turned over to the private sector, freeing up financing for governments to invest in new infrastructure needs.
“Here is the lesson: sustainable financing approaches such as PPPs and infrastructure asset recycling will allow Nigeria to attract significant private sector investment into infrastructure.” While speaking on boosting infrastructure in the country’s economy, the Director-General of Manufacturers Association of Nigeria (MAN), Mr. Segun Ajayi-Kadir, said plans for the sector won’t be achieved considering the infrastructure decay and harsh regulatory operating environment in the country. Ajayi-Kadir explained that the country’s manufacturing sector was yet to get over the many hurdles that are posing risk to its performances in contributing immensely to the country’s gross domestic product (GDP), especially infrastructure decays. He stated that there must be existence of functional basic amenities and infrastructure put in place, which are the missing link in Nigeria’s economy today.
According to him, the reason dearth of infrastructure will be a stumbling block for manufacturing sector hub in Nigeria is because government alone cannot solve it and that’s why MAN’s position has been for Nigeria to adopt private public partnership (PPP) model. The economic expert stressed that allowing private sector to invest in infrastructure development was the only alternative for Nigerian manufacturing sector to attain its potential while government should focus on strengthening the rule of law for a conducive business environment.
Ajayi-Kadir said: “Even before COVID-19, we have been emphasising that manufacturing is the engine of growth and that any country or economy, which ignored its manufacturing base, will not experience growth in its economy. “You know, it (manufacturing) has to be seen as engine of growth. So it is not whether we are promoting it, it has been our main objective of MAN and the main issue raised that manufacturing sector needs to be treated as a critical sector in the country. This has been MAN’s position from the onset.”