Emefiele: Nigeria Requires N35trn Infrastructure Investments For Double-Digit Growth

*Urges govs to make states economically viable
*FG to screen projects for PPP suitability

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has said Nigeria requires about N35 trillion investments in infrastructure for the economy to post a double-digit growth.

But Emefiele, in a goodwill message he delivered yesterday at a webinar on “Financing Public-Private Partnership to Boost Infrastructure Delivery in Nigeria,” organised by the Bureau of Public Enterprises (BPE) in Abuja, added that given the paucity of government revenues, it will be difficult to support such investments using government funds alone.

The Nigerian economy, which is just crawling out of recession, recorded a 0.51 per cent growth in the first quarter of 2021 after a 0.11 per cent growth in the fourth quarter of 2020.

Besides, Emefiele, at another forum yesterday, also called on governors to make their states economically viable in order to reduce their dependence on allocations from the Federation Account.

Emefiele, whose message to the webinar was delivered by the Deputy Governor of the bank on Economic Policy, Dr. Kingsley Obiora, stated that the theme of the webinar was topical as a critical part of efforts to drive sustainable growth of the economy.

He said the COVID-19 pandemic had exerted unprecedented impacts on the economy, adding that interventions by the monetary and fiscal authorities had led to Nigeria exiting recession with muted growth.

He said: “While this news is positive, growth is still well below our population growth of 2.7 per cent. It is therefore imperative that we all work together to harness the growth potential of the Nigerian economy.

“If we take into account Nigeria’s Infrastructure Masterplan, we require close to N35 trillion worth of investment in order to attain double-digit growth. But given the paucity of government revenue, which the BPE director-general mentioned earlier, it will be difficult to support these investments using government funds alone.

“So, finding ways to harness public-private partnerships have become very important and we are happy to acknowledge that these partnerships have started in earnest and the Central Bank of Nigeria looks forward to continuing collaboration with the BPE to harness these partnerships to ensure that we significantly scale up investment in our infrastructure.”

In her keynote address, the Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed, said from the 2021/2022 budget cycle, all infrastructure projects in Nigeria must be screened for Public-Private Partnership (PPP) suitability and compliance with the National Integrated Infrastructure Master plan by her ministry and the BPE before inclusion in national budgets and subsequent procurement.

The minister, who is also the Vice-Chairman of the National Council on Privatisation (NCP), said: “All these efforts are to ensure that PPP takes a center stage in the procurement of infrastructure in Nigeria.”

According to her, the federal government is willing to discuss and incorporate suggestions from stakeholders with a view to strengthening Nigeria’s PPP framework.
She stated that the webinar was an opportunity to hear from participants on the concerns and areas they want the government to address to make investment beneficial and deliver value to the country.

She solicited the support and cooperation of the public and private sectors partners, local and foreign partners, financial institutions and other important key stakeholders towards the successful implementation of the new PPP policy directive.

She added that the present administration is committed to the development of infrastructure through PPP arrangements.

The BPE Director-General, Mr. Alex Okoh, also said in line with its new role in the administration of concession programmes of the federal government, the bureau, in collaboration with the Ministry of Finance, Budget and National Planning had developed a PPP project information tool, which has been forwarded to all ministries, departments and agencies (MDAs), to capture all current and proposed infrastructure projects in the country.

“This will help document a pipeline of PPP projects across various sectors of the economy,” he said.

He added that some MDAs have submitted their PPP Project Information Data ahead of the final submission date of May 31.

According to him, the bureau will partner the United Kingdom Nigeria Infrastructure Advisory Facility (UKNIAF) to screen projects to ensure that only those that are financially as well as economically viable are included in the ‘National Pipeline of PPP Projects’.

He stated that the BPE will also establish a revolving Project Development Fund (PDF) for PPP transactions, while funds realised from the pool will be used to facilitate the proper structuring of PPP transactions.

He expressed hope that financial institutions will support the initiative to increase the number of viable projects that could be successfully brought to commercial and financial close in the infrastructure space through PPPs.

Emefiele Urges Govs to Make States Economically Viable

Also yesterday, Emefiele called on governors to make their states economically viable in order to reduce their dependence on allocations from the Federation Account.

Emefiele, at the inauguration of the Rivers State Cassava Processing Plant in Oyigbo Local Government Area of the state, also told reporters that there was no devaluation of the naira, contrary to speculations.

He, however, lamented that notwithstanding the country’s position as the largest producer of cassava in the world, it spends over $580 million to import its by-products, adding that the country can no longer afford to support continued importation of items that can be produced locally.

Emefiele said the CBN had set aside N1.5 billion for land clearing and urged the states, particularly those in the southern region, to take advantage of the facility to open up their respective economies.

He also advised the governors to woo private investors to help resuscitate their economies to generate employment through agriculture, adding that this will help the states boost internally generated revenue.

While commending the Governor of Rivers State, Nyesom Wike, for the cassava project, he encouraged other governors to emulate the gesture to empower the citizens.

He said: “We seize this opportunity to encourage our states, particularly the southern states, that there are facilities available for you to draw to involve in land clearing.

“At least, N1.5 billion is available for land clearing. It may seem small but it’s a seed that we can start with.

“We need to see to how we can open up our states for the good of our people and also for the economic viability of out states.

“Please, help to make your states economically viable so you can depend less on revenues from FAAC so that you can grow your economy.

“You can encourage private sector who need these processed materials for their final produce.”

On the rumoured devaluation of the naira, he said: “Naira was not devalued, it’s just the handiwork of mischief-makers.

“People just go about, do your business. Naira was not devalued, we will continue to do our business and Nigeria will continue to prosper.”

However, Emefiele stated that the cassava project is designed to support improved production and processing of the commodity into high-quality flour.

According to him, such investments could help drive economic growth, reduce unemployment as well as induce other wealth-creating activities in the state.

He added that it also helps support the CBN’s mandate of promoting economic growth for the country.

The CBN governor expressed delight that the project would improve livelihoods, as well as enhance the sustainability of farming for over 3,000 farmers by guaranteeing the offtake of their farm produce.

He said this guaranteed off-take would encourage participating farmers to improve their output per hectare in order to earn additional income.

He also said the project provided them with a verifiable platform to access finance from the CBN and other financial institutions through the Anchor Borrowers Programme (ABP) among other benefits.

He said with the ability to process over 45,000 tonnes of cassava, the facility would provide high-quality cassava flour for households, industries and bakeries.

Emefiele added that about N7.43 billion had been accessed by four out of the six states in the South-south region to open up more land for cultivation, create access roads to agricultural lands and provide infrastructure among other support services in the region.

According to him, these measures are helping to induce greater activity in the agricultural sector and are enabling the movement of goods from farm to factories, and to the markets.
Emefiele said the current situation had made it imperative for the central bank to work towards supporting programmes to enable greater cultivation and processing of key agricultural commodities.

He said so far, the apex bank’s developmental finance initiatives had been focused on creating an enabling environment to drive both public and private sectors’ participation in the real sector with strategic deliverables around price stability, job creation, financial inclusion, import substitution and accretion to foreign reserves, among others.

He added that the bank’s interventions seek to improve access to credit for households and businesses, which will enhance productivity and create value across a wide range of economic activities.

Emefiele said so far, the Rivers State Government had accessed over N13 billion from the CBN’s various intervention programmes.

He said: “As I said earlier, we have given them over N10 billion which have been fully repaid. And anytime they ask for money because he (Wike) is a very good debtor, we will always give them the facility.

“You heard him say that around May next year, even a year before he hands over, that he would have no debt. So he can come and take the money and pay back next year.”

On his part, the Minister of Agriculture and Rural Development, Alhaji Sabo Nanono, said the country must strive to grow its food despite the current security challenges facing it.

“Obviously, we cannot succumb to our security challenges, we have to eat, we have to farm whether there is security or not and that is absolutely necessary.

“The security matter is not affecting agriculture alone but the entire country, and I think in spite of all the security issues people have been raising, agriculture has been growing in this country even last year.
This season’s dry farming will multiply what we have done last year,” Nanono told reporters.

Local Content and Sustainable Development in Global Energy Markets

(Cambridge University Press, January, 2021) By Professor Damilola S. Olawuyi, SAN, FCIArb, Professor of Law and Deputy Vice-Chancellor, Afe Babalola University, Ado Ekiti

For more information or to pre-order your copies, please contact: Mr. Keji Kolawole: info@ogeesinstitute.edu.ng; Twitter: @dsolawuyi, Tel: +234 81 40000 988

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