Tackling Nigeria’s Infrastructural Deficit
If Nigeria does not start walking the talk regarding her infrastructure development, the country may run into a serious crisis in the near future. With a population expected to hit 397 million by 2050, Nigeria’s infrastructure will come under huge pressure, hinder economic development and deny citizens of the much-desired national prosperity except something drastic is done.
For decades, Nigeria failed to develop its infrastructure. It got so bad that in 2015 the country needed N10.63 trillion ($67 billion) to build hospitals and schools, fix the energy sector, and repair bridges and roads. Though the Federal government budgets an average of $5.9 billion to fund infrastructure annually, endemic corruption, nepotism and poor implementation have ensured little progress. No surprises why the International Monetary Fund (IMF) recently pegs the value of Nigeria’s infrastructure stock at 20-25 per cent of GDP. Compared with the 70 per cent average for developed economies, the reason for Nigeria’s poor global competitiveness despite its stature as Africa’s biggest economy becomes more glaring.
The Federal Government must increase capital expenditure in the national budget. Nigeria’s aggregate expenditure in the national budget has grown annually but capital expenditure has averaged about 25 per cent. In 2008, allocation for capital expenditure was 1.2 trillion, representing 37 per cent of the total budget of 3.3 trillion.
By 2015, allocation for capital expenditure dropped to a mere 9 per cent (N387 billion) of the proposed aggregate expenditure of N3.6 trillion. One of the present administration’s promises to Nigerians is to incrementally allocate more funds to capital expenditure. This is a good step in the right direction. In 2016, capital expenditure moved to 25 per cent ( 1.6 trillion) of the total budget of 6.1 trillion.
In 2017, capital-expenditure increased to 30 per cent (N2.24 trillion) out of the proposed aggregate expenditure of N7.298 trillion. And in 2018, capital expenditure dropped to 28 per cent (N2.428 trillion) out of the proposed aggregate expenditure of N8.612 trillion. If Nigeria must bridge the gap in infrastructure, government must prioritize capital expenditure at least for the next decade.
Ojo, the CEO of Caritas Communications, with offices in Nigeria and Ghana, writes from Lagos