The Central Bank of Nigeria has said the newly created
Infrastructure Finance Office will enhance a sustainable financing framework to
address infrastructure gaps in the country. The CBN is also working with the
Infrastructure Concession Regulatory Commission (ICRC) to achieve set targets.
Uji Amedu, the Head of the Specialised Services Division of the
bank, said during a visit to the commission earlier in the week, that the new
unit will address funding gaps in infrastructure development.
A statement issued by Olugbenga Adegbesan, communications head
at the commission, quoted Mr. Amedu as saying, “The Central Bank appreciates
the need to provide some intervention finance but the burden of huge and
long-term facility for infrastructure financing can also be borne by other
financial institutions, like the insurance companies and the pension fund
administrators, subject to the provisions of relevant laws.”
He also noted that the roles of the commission were similar to
those of other government institutions in developed economies, adding that with
the necessary support from public and private institutions, the country’s
infrastructure deficit would witness a turnaround.
Mansur Ahmed, the commission’s Director General, described the
Central Bank’s initiative as a catalyst for actualising the economic vision of
the government in the area of physical development.
He said that such financial policy will provide succour to
prospective private investors in the government’s Public Private Partnership
programme.
Beyond government
Mr. Ahmed said the provision of public goods, particularly
infrastructure services, is no longer in the sole custody of public
institutions. “Demands in terms of the required technical, managerial and
institutional capacity for the growing economy and population is beyond the
government.” He added that the commission is expected to guide government
ministries, departments and agencies responsible for infrastructure services to
execute their projects in an effective and sustainable manner. “The commission
coordinates the process and provides guidelines to ensure value for money and
reasonable returns for private investors,” he said.
The commission
The Infrastructure Concession Regulatory Commission (ICRC) was
established by an Act in 2005 to regulate Public-Private Partnership endeavours
of the Federal Government, aimed at addressing Nigeria’s physical
infrastructure deficit which hampers economic development.
The Commission is responsible for setting forth guidelines to
promote, facilitate, and ensure implementation of Public Private Partnership
(PPP) projects in Nigeria, with the objective of achieving better value for
money (VfM) for infrastructure services and enhanced economic growth.
The ICRC Act seeks to provide for the participation of the
private sector in financing, construction, development, operation, and
maintenance of infrastructure or development projects through concession or
contractual arrangements. Thus, the Commission is to regulate, monitor, and
supervise the concession and development of projects.
The Commission, inaugurated on November 27, 2008, is expected to
take custody of every concession agreement made under the ICRC Act and monitor
compliance with the terms and conditions of such agreements and ensure
efficient execution of any concession agreement or contract entered into by the
government.
Specific details of the finance plan could not be ascertained as
at press time, as Mohammed Abdullahi, the spokesperson for the Central Bank,
neither picked his calls nor replied his text messages.
Infrastructure challenges
Nigeria has continued to battle with infrastructure challenges,
a major factor that has contributed in keeping investors at bay. Businesses and
investment continue to be hindered by power, ports challenges, fuel supply, bad
roads, lack of adequate security for life and property, inadequate access to
credit, policy inconsistency, corruption and lack of skilled labour.
Nigeria’s business men and women are not expecting improvement
in Nigeria’s business climate anytime soon as and have a pessimistic view of
the environment in the short run.
In a national survey carried out by Nigeria’s premier and most
credible research firm, NOI Polls, in partnership with the Nigeria Economic
Summit Group (NESG) earlier in the month, top business executives in the
country stated that their businesses have continued to be hindered by the lack
of these basic amenities in the nation.
