Nigeria needs $350bn to fix infrastructure – AfDB

(FILES) A picture taken on November 16,16 June 2013, Lagos – The African Development Bank, AfDB, has disclosed that Nigeria would require about $350 billion over a period of 10 years to fully implement the proposed Infrastructure Action Plan, IAP, which is expected to address the current financing deficit.

The bank said such investment in infrastructure is expected to rise to a peak of 12 per cent of Gross Domestic Product, GDP, by 2016 before falling to about 10 per cent by 2020.

In its monthly Nigeria Field Office, NGFO, newsletter for the month under review, the AfDB disclosed that if successfully implemented, the IAP would spur the growth of non-oil GDP by 10 per cent per annum from 2015 to 2020 compared with the recent growth of about 8.5 per cent yearly.

The report also disclosed that the Federal Inland Revenue Service, FIRS, collected the sum of N5 trillion from taxes last year.

It said the amount, which is about 8.20 per cent increase over the collections in 2011 was the highest collection in the history of the FIRS.

Although the various reforms instituted by government to increase non-oil tax were yielding results, the problem of how to commit the increased tax revenue to developmental projects to improve the standard of living of Nigerians remains a challenge.

The Report disclosed that the non-oil taxes accounted for 36 per cent of total collections while oil sector tax revenue represented about 64 per cent.

It said tax revenue collection at the federal level had been dominated by oil sector tax averaging about 76 per cent of total tax revenue while the non-oil tax revenue averaged 24 per cent from 1970 through 2011.

“This dominance makes tax revenue highly susceptible to oil price fluctuation in the international oil market.”

“Over the years, the Nigerian authorities have embarked upon measures to increase the non-oil tax revenue to reduce the vulnerability of tax revenue to the vagaries of oil price in the international market,” the Report disclosed.

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