Amidst anxiety over debt overhang, the federal government has intensified efforts to involve the private sector to bridge the estimated N350 trillion infrastructure gaps across the country.
The move is part of the five-year Medium-Term National Development Plan (MTNDP), 2021-2025, which is part of the innovative financing options.
Nigeria faces a critical infrastructure deficit projected at over $3 trillion in the next 26 years, with an average annual budget of approximately $29 billion in the last 10 years, of which figure only about 30 percent was allocated to capital expenditure.
The Minister of State for Finance, Budget, and National Planning, Prince Clem I. Agba disclosed the funding plan yesterday at a media briefing ahead of the 27th Nigerian Economic Summit (#NES27) holding from October 25-26, 2021 in Abuja.
The proposed amount is the equivalent of 18 years national budget of the federal government based on the 2022 budget estimate of N16.4 trillion.
If the private sector agreed and keyed into the plan, companies would execute capital projects in various sectors and therefore help reduce the preponderance of borrowings by the government to implement such projects.
Conversely, the companies would recoup their monies from the taxes they were supposed to pay the government over a certain period agreed by the two parties.
Experts believed that when the arrangement works out well, Nigerians would be the ultimate beneficiaries because the construction of roads, bridges, railways, hospitals, dams and other social amenities would be faster.
Recall that recently, President Muhammadu Buhari requested the Senate to consider and approve an external borrowing plan amounting to about N2.5 trillion to fund projects captured under the 2018-2021 borrowing projections.
In September, the Debt Management Office (DMO) said Nigeria’s total public debt (federal and state governments) climbed to N35.46 trillion at the end of the second quarter of 2021.
Speaking at a two-day mid-term ministerial performance review retreat in Abuja, President of the African Development Bank (AfDB), Akinwumi Adesina, said Nigeria’s debt service to revenue ratio was high.
Adesina said Nigeria must “decisively” resolve its debt challenges to ignite economic growth.