Experts laud, caution FG over new N20tr infrastructure development fund
INFRASTRUCTURE development experts have advocated funding industry- specific interventions, which will be tailored toward filling the nation's infrastructure gap.
The Federal government last week approved the establishment of the Renewed Hope Infrastructure Development Fund ( RHIDF) to facilitate effective infrastructure development across critical sectors, including agriculture, transportation, ports, aviation, energy, healthcare, and education. The RHIDF scheme is targeted at closing the $ 878 billion infrastructure gap by deploying as much as $ 35 billion yearly up till 2040. The plan targets an initial take- off fund of N20 trillion.
Minister of Information and National Orientation, Mohammed Idris, said a study concluded that Nigeria would require about $ 878 billion between 2016 and 2040 to bridge the gap, adding that it comes down to about $ 35 billion yearly needed to bridge the infrastructure gap in the country.
“Now, what that means is that from 2016, going to 2024, about $ 25 billion will be required yearly to bridge that infrastructure deficit,” he said.
Giving further clarification on the initiative, Special Adviser to the President on Information & Strategy, Bayo Onanuga, said: "With eyes on raising N20 trillion, about $ 14 billion take- off capital, the fund will support projects that will promote growth, enhance local value- addition through backward, forward and parallel linkages."
Insufficient infrastructure facilities have been one of the militating factors against sustainable economic growth in the country. Since independence, governments have made various efforts to bridge infrastructure gaps, which have persistently triggered recurring rural- urban migration amid an increase in yearly population growth rate causing many Nigerians to compete for limited facilities.
While some experts lauded the new fund and are hopeful of great impact, others are sceptical about the impact it will have on the nation’s infrastructure. A former Head of the Department of Building, University of Lagos, Prof Godwin Idoro, said the government should look at the various sectors included in the fund, and determine what proportion will be allocated for road, and other sectors.
Idoro said: “The fund is a generalised one and it is not dedicated to any particular area. We don’t know how much the Federal Government is allocating to the fund. Even, if the yearly $ 25b is dedicated to roads, what impact can it have on roads? Would that be enough to rehabilitate one road and cater for other sectors? For something to be impactful, we expect that the fund will be adequate.”
The Project Director, Arctic Infrastructure, Mr Lookman Oshodi, observed that in the past, Nigeria has had a Presidential Infrastructure Development Fund, as well as a Sovereign Wealth Fund to improve and support infrastructure delivery in the country. He asked, “How has the fund performed?
“To those who put the RHIDF together, have they done a critical analysis of what happened regarding the past infrastructure development fund? Infrastructure development seems to be concentrating on two major and one minor area. These are transportation, agriculture, and power sectors. When you look at the array of infrastructural gaps in the country, it goes beyond those three sectors.
“Naturally, infrastructure development funds are supposed to be centrally shaped, take care of one component and the others. One, where is the source of funding, who will warehouse the fund, and the other part is to disburse to the beneficiaries. These areas should be well looked at,” Oshodi said.
On the aspect of fund disbursement, he said there is a need to look at how feasible the fund will be, identification of the project developers, how easy will it be for them to access the fund, what kind of project preparation they need, documentation and how long will it take them to access the fund when they make applications.
"Is there any matching fund that the project developers will need to provide or will the infrastructure development fund provide 100 per cent funding for the project? If it will provide 100 per cent funding, that makes the infrastructure development fund 100 per cent perfect. But if it will require other co- financiers that will bring maybe 50 or 20 per cent, the fund may not make a meaningful impact, especially if cofinanciers are not bringing money, it will put the project at risk, “he said.
On possible risks, he emphasised the need to talk to experts and not politicians in delivering the projects. "In Africa, most projects that are supposed to deliver good impacts to the people are subjected to political transactions and influences, and in the end, such projects may not be delivered timely and project may not make any impact. Do we have the right skills and expertise, delivering projects to specification and people who can respond to global dynamics in project delivery?" he asked.
Oshodi said: “From what has been observed it appears the expertise is not where it should be in infrastructure development. We could see how that is playing out in many of our projects. Projects that are supposed to last three years take 10 years and we are still on it.