The African Development Bank (AfDB) has unveiled a grand design to swell investments in the Nigerian economy.
The AfDB would through this initiative partner with like-minded development partners and financial institutions in the organized private sector (OPS) to inject a cocktail of instruments, including direct lending, equity participation, de-risking facilities, and the platform of the Africa Investment Forum platform to support the government.
This initiative aims to help other key stakeholders in implementing bold and innovative approaches to drive private sector participation and investments in the economy.
Already, the Bank has loaned out $256 million and $200 million respectively for the Nigeria Transmission Expansion Project (NTEP-1) and the Nigerian Electrification Project (NEP), which will contribute to strengthening the transmission network and promote off-grid solutions.
Also, it has made an impact in the transport sector with $430 million support for the Enugu-Bamenda road linking Nigeria and Cameroon, expected to be completed this year. This will provide a gateway for enhanced trade between West Africa and Central Africa. The two projects have attracted an AfDB financing of $886 million.
Speaking at a one-day investors webinar to showcase the investment opportunities from the Federal Government of Nigeria’s reform and privatization activities, the regional bank President and Chief Executive Officer, Dr Akinwunmi Adesina added that the construction of the Lagos-Abidjan highway which is expected to commence from next year would unlock 85 percent of trade within the ECOWAS sub-region.
While noting that the Federal Government had spearheaded various reforms in the banking sector that have enhanced the resilience of the financial system, Adewunmi said there is a need to stay the course in completing the bold reforms initiated to restructure the energy sector.
Nigeria is battling an infrastructure deficit, which is one of the main constraints to industrial development and national competitiveness. According to estimates, infrastructure constraints cost the country around four percent of its yearly Gross Domestic Product growth.
Since about $100 billion is needed annually for the next 30 years, he said the time has come to create an enabling environment for Public-Private Partnerships to close Nigeria’s infrastructure gap.
Represented by the Director-General, AfDB Group, Nigeria Country Department, Lamin Barrow, the AfDB boss noted that the bank was supporting the government’s efforts in addressing the infrastructure deficit in Nigeria through the development of both national and regional infrastructure.
He also assured of the AfBD’s support in the energy sector to help improve access and reliability of electricity supply by attracting private sector participation.
‘We are working closely with the ECOWAS Commission and the concerned countries to finalise the feasibility studies for the landmark Abidjan-Lagos Highway.
‘We expect the construction of the corridor to commence next year. This highway will link 85 per cent of the trade volumes in ECOWAS.
‘We are also supporting the rollout of new flagship programs such as the Special Agro-Industrial Processing Zones (SAPZs) and Nigeria Innovation Program (Digital Nigeria) to unleash the potential of the economy. These will be complemented by enhanced policy dialogue with a view to consolidating Nigeria’s strategic position as the bulwark for the regional economy.
‘Attracting private sector participation is critical for mobilizing investment resources and ensuring sustainable operation and maintenance of public infrastructure assets,’ he added.
AfDB DG there urged governments to put in place adequate regulatory frameworks to treat infrastructure as an asset class and view privatization as an opportunity to optimize underperforming assets.
‘Privatisation and commercialization of public enterprises should therefore be more than just a transaction but an institutionalized mechanism with a long-term perspective.
‘They represent a new way of life/doing business to accelerate the achievement of the SDGs, an inclusive society, and as tools for building dynamic and competitive economies,’ he noted.