A grand design to swell investments in the Nigerian economy has been unveiled by the African Development Bank (AfDB), which said it would partner with like-minded development partners and financial institutions in the organised private sector (OPS) to inject a cocktail of instruments, including direct lending, equity participation, de-risking facilities, and the platform of the Africa Investment Forum platform to support the government.
This initiative is also to help other key stakeholders in implementing bold and innovative approaches to drive private sector participation and investments in the economy.
Already, the Bank has loaned out $256 million and $200 million respectively for the Nigeria Transmission Expansion Project (NTEP-1) and the Nigerian Electrification Project (NEP), which will contribute to strengthening the transmission network and promote off-grid solutions.
In the transport sector, the bank’s $430 million support for the Enugu-Bamenda road linking Nigeria and Cameroon, expected to be completed this year. This will provide a gateway for enhanced trade between West Africa and Central Africa. The two projects have attracted an AfDB financing of $886 million.
The regional bank President and Chief Executive Officer, Dr Akinwunmi Adesina, at a one-day investors webinar to showcase the investment opportunities from the Federal Government of Nigeria’s reform and privatisation activities on Tuesday, added that the construction of the Lagos-Abidjan highway which is expected to commence from next year would unlock 85 per cent of trade within the ECOWAS sub-region.
He noted that while the Federal Government had spearheaded various reforms in the banking sector that have enhanced the resilience of the financial system, there is a need to stay the course in completing the bold reforms initiated to restructure the energy sector.
Nigeria’s infrastructure deficit is one of the main constraints to industrial development and national competitiveness.
Estimates indicate that infrastructure constraints cost the country around four per cent of its yearly Gross Domestic Product growth.
Given the huge amounts needed which is about $100 billion annually for the next 30 years, he said the time has come to create an enabling environment for Public-Private Partnerships to close Nigeria’s infrastructure gap.
Adesina, who was represented by the Director-General, AfDB Group, Nigeria Country Department, Mr Lamin Barrow, noted that the AfDB was supporting the government’s efforts in addressing the infrastructure deficit in Nigeria through the development of both national and regional infrastructure.
In the energy sector, he assured of the AfBD’s support to help improve access and reliability of electricity supply by attracting private sector participation.
He added: ‘We are working closely with the ECOWAS Commission and the concerned countries to finalise the feasibility studies for the landmark Abidjan-Lagos Highway.
‘We expect the construction of the corridor to commence next year. This highway will link 85 per cent of the trade volumes in ECOWAS.
‘We are also supporting the rollout of new flagship programs such as the Special Agro-Industrial Processing Zones (SAPZs) and Nigeria Innovation Program (Digital Nigeria) to unleash the potential of the economy. These will be complemented by enhanced policy dialogue with a view to consolidate Nigeria’s strategic position as the bulwark for the regional economy.
‘Attracting private sector participation is critical for mobilising investment resources and ensuring sustainable operation and maintenance of public infrastructure assets,’ he added.
To this end, the AfDB DG said governments should put in place adequate regulatory frameworks to treat infrastructure as an asset class and view privatisation as an opportunity to optimise underperforming assets.
‘Privatisation and commercialisation of public enterprises should therefore be more than just a transaction but an institutionalised mechanism with a long-term perspective.
‘They represent a new way of life/doing business to accelerate the achievement of the SDGs, an inclusive society, and as tools for building dynamic and competitive economies,’ he noted.