07 November 2013, Lagos – A World Bank fact sheet on infrastructure in Sub-Saharan Africa has shown that an estimated N6.8 trillion annual investment will be required for addressing Africa’s infrastructure deficit.
The fact sheet also noted that a further N5.9 trillion investment and an overall price tag of N12 trillion would be required to tackle the challenges of infrastructure operations and maintenance.
According to the report, “The total required spending translates into some 12 per cent of Africa’s GDP as there is a funding gap of N56.6 trillion per year.”
Recall that in the 2011 AfDB report, the Africa Infrastructure Country Diagnostics reported that the infrastructure need of Sub-Saharan Africa exceeds N148.8 trillion annually over the next decade.
The report noted that, “Currently, there is an under provision leading to a financing gap of more than N800 trillion. The poor state of infrastructure also in the sub-Saharan Africa reduces national economic growth potentials by two percentage points and productivity by as much as 40 per cent annually.”
The fact sheet also noted that, “Africa’s main infrastructure deficit is found in the power sector, whether measured in terms of generation capacity, electricity consumption or security of supply, as Africa’s power infrastructure delivers only a fraction of the service found in other developing countries,” adding that, “The 48 countries of Sub-Saharan Africa, with a combined population of 800 million people, generate roughly the same amount of power as Spain, which has a population of 45 million.”
Speaking at the second biennial conference of West African Institute for Financial and Economic Management, WAIFEM, in Lagos on financing infrastructure for sustainable development in West Africa, the governor of Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi, affirmed the critical need and dearth of infrastructure in the continent and stressed on the need for the region to come together and develop its infrastructure, as it is the capital stock that facilitates the provision of public goods and services.
According to him, “Socio-economic development can be fast-tracked by the presence of adequate and efficient infrastructure as it provides a linkage to the global economy and creates a multiplier effect that benefits the entire society directly and indirectly. Infrastructure development drives economic growth and therefre, emerging market and developing economies need to increase infrastructure investment to enhance access to energy, clean water and basic transport for an all-inclusive economic growth and development.”
He noted the CBN through the Bankers’ Committee has taken steps to improve the financing of infrastructure projects in the country by articulating and strategising on ways to boost lending to the most critical sectors of the economy such as power, transportation and agriculture and accelerate growth.
He said, “The bank also financed the drafting of the National Infrastructure Financing Policy in 2012. The key thrust of the policy was to provide a framework for leveraging private finance for infrastructure development; promoting the involvement of specialised funds and multilateral agencies in the financing of development projects; diversifying and developing non-bank sources of long term finance for infrastructure financing; and recommend incentives that would spur local and international project developers and financiers, to invest in infrastructure projects in Nigeria.”
Jonah Nwokpoku, Vanguard