Transport and trade
Although power is so often a preoccupation in Nigeria, the growth in the country’s domestic and export markets and its rapid urbanisation mean that there is a major need for, and opportunity in, transport and municipal infrastructure.
The federal and state governments have created a number of major initiatives to drive the development of vital transport and trade infrastructure across the country, linking its markets and people to the region and the world. The long lines of freighters waiting outside of the ports in Lagos and Port Harcourt are testimony to the need to improve the existing facilities, and to the potential efficiency savings to the economy should the bottlenecks be widened.
Some of these projects are already under way. The Lekki Peninsula, to the east of Nigeria’s commercial capital of Lagos, is home to a number of massive infrastructure projects, including a $1.5 billion deep sea port, which aims to add 2.5 million TEU capacity to the country’s terminal market and accommodate large capacity ships.
The peninsula is also benefiting from investment in toll roads, an economic free zone housing major industrial projects, and a new airport, the Lekki-Epe International Airport.
Across the country, bridges, roads and railway construction and renovation projects are under way. In total, Nigeria needs more than $14 billion in investment in infrastructure each year until 2020 to begin to close the gap, according to the World Bank.
To bridge this gap, the government has prepared a 30-year strategic master plan for investment in infrastructure. State resources will also be used to crowd in investments from the private sector and international development finance institutions.
Individual states and the federal government have been pursuing opportunities in public-private partnerships. Both the World Bank and the United Kingdom’s Department for International Development have been working with government and the Infrastructure Concession Regulatory Commission (ICRC) to create an environment that is conducive to attracting these kinds of investments.
“It’s important to realise that not all infrastructure can be financed by the private sector,” Alli says. My own point of view, though, is that if what can be financed by the private sector is financed by the private sector, that frees up capacity for the government to finance things that can only be financed by the government.”
Part of this will involve the mobilisation of state resources through the newly-created sovereign wealth fund. This fund, with an initial capitalisation of $1 billion, will invest in critical infrastructure for the development of the country.
With the infrastructure gap shaving several percent from gross domestic product growth each year, and with the deficit routinely cited as the primary concern of entrepreneurs in the country, fixing the problem is a massive opportunity for infrastructure investors looking for new sources of growth, and could potentially unlock the latent potential in Nigeria’s economy.