AfDB rolls out plan to close $130bn infrastructure gap - PUNCH
BY Everest Amaefule, Abuja
The African Development Bank on Tuesday unveiled a plan to close the $130bn gap in infrastructure financing in Nigeria and other African countries.
The plan, which was unveiled at the Africa Infrastructure Forum Roadshow held in Abuja on Tuesday, will take full shape at the African Investment Forum scheduled to hold in Johannesburg, South Africa in November.
According to the plan, the AfDB will galvanise private sector funds and other development partners to handle infrastructure projects that have been verified by the bank and approved by the respective countries.
Among the projects that have been selected in Nigeria by the AfDB for funding through the new mechanism are the Abuja Integrated Infrastructure Project, otherwise known as the Satellite Towns, and the Bus Rapid Transit and the Eko Atlantic City project in Lagos.
The Senior Director, Nigeria Country Office, AfDB, Ebrima Faal, said the African Investment Forum was the continent’s new premier investment marketplace and the most important initiative for accelerated economic development and transformation.
Faal stated, “Over the last decade, and despite impressive growth rates in most of the continent, Africa’s infrastructure needs remain formidable with annual financing gap of between $130bn and $170bn.
“Nigeria’s infrastructure cumulative financing needs are estimated to reach $3tn by 2044 or about $100bn annually. This is all happening at a time when public sector finances are extremely pressured.”
He added, “We are aware that traditionally, infrastructure development has mainly been the domain of the public sector, depending largely on the generosity of donors. It has become increasingly clear over the last 50 years, but particularly following the 2008 financial crisis, that governments are unable to meet the growing demand for infrastructure and services alone.
“As a result, large fiscal deficits arising from imprudent fiscal management policies have led to decreasing public expenditure on infrastructure. This has widened even further the infrastructure financing gap and preventing the construction of much needed transformative infrastructure in the continent.”
Faal added that the new funding mechanism had become imperative given that Overseas Development Assistance had become unpredictable, encumbered and decreasing.
According to him, whereas in the past, the ODA accounted for about $6bn or 15 per cent of the financing of infrastructure, the amount has been declining and has become more unpredictable.
There is therefore a critical need to change the current funding mix and create partnerships to finance infrastructure and other projects in Africa, he added.
Speaking at the event, the Senior Special Assistant to the President and Coordinator, Economic Recovery and Growth Plan, Mr Folarin Alayande, commended the AfDB for seeking alternative funding for infrastructure development in Nigeria and Africa in general.
He said the Federal Government would work to sustain the gain that had been made in declining inflation rate, adding that the target was to hit single digit by 2019.
Alayande noted that the country was ready for investment but regretted that the access to long term financing had been a major hindrance.