Nigeria’s infrastructure gap remains a critical bottleneck that continues to undermine the country’s economic potentials. Thus, different suggestions have been put forward as measures to spur improvement in the decrepit state of infrastructure. While major bodies like the International Monetary Fund (IMF) and African Development Bank (AfDB) have estimated that the infrastructure gap would require c.$3.0tn to close, the Secretary General of the Federation, Boss Mustapha has stated the Federal government is looking to spend $2.3tn over 23 years (2020 – 2043) to close the gap. This is according to the National Integrated Infrastructure Master Plan (NIIMP), a 23-year master plan originally developed in 2012  and reviewed in 2020.

The NIIMP paper is expected to see significant investment in major sectors of the economy, considering the widespread nature of the infrastructure gap across sectors. For example, the energy sector will gulp the most, with $759.0bn expected to be spent while the transport sector will see $575.0bn spent to revamp the infrastructure network. That said, we note the project is as usual very ambitious but we remain concerned about the funding source for these projects. Possible sources of finance have been identified, including: government budget, government borrowing, the Sovereign Wealth Fund, & Pension Funds and private sector partnerships.

Looking ahead, we believe any meaningful improvement in the state of infrastructure will require significant private sector participation as the federal government remains clearly unable to fund these capital projects. This would enable access to increased funding and improved maintenance culture considering these projects would be revenue generating (to help investors recoup investments). Also, the successful launch and operation of Infraco (Nigeria’s infrastructure company), will play a critical role. That said, resolving the infrastructure challenge would significantly help to improve prospects of achieving the economy’s potentials.