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Nigeria’s public infrastructure investment fails to match population growth of 2.5% P/A- Report

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Nigeria’s allocation of public funds towards critical sectors to essential infrastructure falls short of meeting the demands of a population that is expanding at an approximate annual rate of 2.5%, a Coronation report has said.

According to the research seen by ThePressNG, Guy Czartoryski, Head of Research at Coronation said that the record of the Nigerian government in capital expenditure over several decades underscores the need to increase private-sector investment.

The report noted that during the period 1981-90, the Federal Government’s capital expenditure on average amounted to 3.6% of GDP.

This according to the infrastructure report, rose to a respectable 5.2% during the period 1991-2000, But during the period 2001-2010, the average halved to 2.5%, an extraordinary reversal given the oil price boom that started in 2002 and lasted well into 2014, with the price of Brent frequently trading at over US$100/bbl. Inflows of petro-dollars into government coffers did not translate into proportionately more being spent on capital expenditure, surely a missed opportunity.

It noted that in some cases, the models are built on a lengthy wish list of projects to be completed at current prices, in other cases a sophisticated calculation tracks what projects have been completed elsewhere in comparable circumstances and what their net present values are.

The report noted that Nigeria is ripe for increasing private investment in infrastructure adding that the trend in government investment in infrastructure has fallen short over several decades, something that has created, cumulatively, an enormous deficit as infrastructure fails to meet the country’s needs.

It said that the private sector has begun to respond, with the initiation of public-private partnerships and the launch of private-sector infrastructure funds.

 

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