Review Strategy For Infrastructural Development, Expert Tells FG

The private sector should be allowed to fund commercially viable infrastructure projects as a way of meeting the infrastructure challenges facing the country

The Chief Executive Officer of Cowry Assets Management Ltd, Johnson Chukwu, said this on TVC News Business Nigeria programme while discussing issues surrounding the country’s N13.08trn 2021 budget.

The expert said the government has to review and possibly adopt alternative infrastructural development approaches used by other countries.

This, he noted, should include Public Private Partnership arrangement.

He said, “We need to review our strategy for infrastructural development. As it stands today, our revenue is not strong enough to support the level of infrastructure and the speed we want to develop infrastructure in the country.”

He expressed doubt over the ability of the Federal Government to achieve the N7.9trn revenue target in view of the revenue challenges facing the country.

Chukwu said, “That for me is always a concern because in effect, we are going to borrow partly to fund recurrent expenditure before we talk about the N3.8trn they want to send on infrastructure.

“I am doubtful if the government can achieve a N7.9trn revenue next year given that the economy is just coming out of recession.

“Most of the revenue heads other than the projected from the oil and gas may be difficult to attain next year. Even if you cast your mind back to 2019, total recorded revenue was N4.12trn.”

With a rising debt profile, Nigeria’s total debt servicing in 2019 was about N2.45trn, while total revenue was N4.1trn.

Chukwu said oil rich Nigeria may spend over 50 per cent of its 2021 revenue on debt servicing alone, as the country’s debt continues to surge.

He said the development will place capital expenditures at risk of funding.

The expert said the pattern has led to delays in the implementation of capital projects over the years, including the Second Niger Bridge.

President Muhammadu Buhari recently said the second Niger bridge was about 42 per cent completion.

But the expert said “If in six years we have achieved 42 per cent completion, then we have to do another eight years at the same rate of funding to be able to complete that project.”

Former Nigerian President, Goodluck Jonathan had initiated the 1.6km second Niger Bridge as Public Private Partnership with Julius Berger- Nigerian Sovereign Investment Authority consortium.

The arrangement was a Design, Finance, Build, Operate and Transfer model valued at $653m with the Federal Government contributing only $150m.