Borrowing Being a Major Means of Financing Infrastructure Results in Nigeria’s High Debt Profile- Hamalai


  • Posted on

    Thursday November 2017

  • Posted at

    08:14 AM

Link

http://nils.gov.ng/news/item/209

The Director-General of the National Institute for Legislative Studies (NILS), Prof. Ladi Hamalai, said borrowing had been a major means of financing infrastructure, making the country’s debt profile high.

She made this known at a one in the series of Public Lectures on Review of 2018 Budget Estimates and Analysis organized by the Institute on Wednesday, 29th November, 2017 at the NILS training room in Abuja.
Hamalai said that there was need for stakeholders to come up with debt management strategies to make debt-servicing easier. “The stakeholders here should come up with suggestions that we will send to policy makers and the lawmakers who are waiting for the outcome of this workshop. “This will enable them make their own contributions in coming up with required framework on issues that have been weighing the country down,’’ she said. She called for proper planning, saying that it was important in infrastructure development. The Director-General said that a Bill was being drafted in that regard to ensure a development plan that would last for at least two years without interruption.

According to her, once the Bill becomes law, it will be mandatory to complete ongoing projects before proceeding with new ones.

The former Minister of Budget and Planning, Dr Shamsuddeen Usman, who was a guest presenter at the Public Lecture said about 2,900 billion dollars was required for Nigeria’s infrastructure development from 2014 to 2044.. He decried the infrastructure deficit in the country, and said that the estimates for infrastructure development were arrived at when Nigeria’s 30 years Integrated Master Plan was developed a few years ago.

He explained that out of the development projection, 127 billion dollars was earmarked to be spent between 2014 and 2018. The former minister added that from the 127 billion dollars estimate, an average of 25 billion dollars was estimated for infrastructure development annually during the period. However, he disclosed that in spite of the estimation, only between Nine billion dollars and 10 billion dollars was currently being spent on infrastructure development. “We are not doing well against our competitors like Brazil, China and South Africa. “We need an integrated infrastructure development like other countries to put the country on the same pedestal with these countries. “Unfortunately, the kind of coordination and integration we need to develop our infrastructure is not there because the various agencies of government do not collaborate to make this happen,’’ he said.
Usman pointed out that different factors were responsible for the country’s infrastructure deficit, which had adverse effect on economic development.

According to him, there is a need to address not only the amount of money earmarked for infrastructure but the quality of infrastructure that will stand the test of time. He called for a focus on national infrastructure development that was aligned to regional and local infrastructure for optimum result.

The former minister also called for Public-Private-Partnership (PPP) in the country’s development plan, adding that many private investors were interested in partnering with government to develop the country’s infrastructure. “Public investment in infrastructure can be increased through selling of assets, which is privatization. “Also given the fiscal and other political and social constraints, private finance can make a significant contribution. “Institutional investors and banks have about 120 trillion dollars in assets that could support infrastructure investment. “In the same vein, there is a growing appetite for investing in infrastructure by different classes of private investors. “Unfortunately, there are several factors inhibiting the PPP and they include confusing and conflicting signals from governments, their agencies and regulators.

“There is also lack of proper identification and allocation of risks and lack of consistency in deal flow,’’ he said. He also stressed the need for consistency in policies and programmes, continuous reforms to bring down cost of projects, more focused anti-corruption crusade and improvement in due process.

Usman, however, commended the present administration for improvement in Ease-of-Doing-Business and other efforts aimed at improving the country’s infrastructure development.