Nigeria can bridge the infrastructural gap and also increase productivity if only it could leverage on alternative sources of infrastructure financing such as the capital market.
Acting Director-General, Securities and Exchange Commission (SEC), Ms Mary Uduk made this known at the 2019 Annual Workshop organised by the Capital Market Correspondents Association of Nigeria (CAMCAN) held in Lagos.
Speaking on the theme of the workshop, “Bridging Nigeria’s Infrastructure Gap: The Capital Market Option”, Uduk who was represented by SEC Head, External Relations Department, Mr Sufian Abdulkarim, stated that Infrastructure development is important for a country’s sustained economic growth and competitiveness.
Uduk said that a well-developed infrastructure has the potential to increase productivity which leads to poverty and unemployment reduction, facilitate trade and promote innovation in an economy.
Uduk noted that the theme of the workshop is timely as Nigeria has a huge gap in infrastructure base measured through levels of physical capital of roads, public education, electricity production, health infrastructure, and access to treated water.
According to her, a report by the African Development Bank on Nigeria’s Infrastructure Plan in 2013 had estimated that Nigeria would need to invest about $350 billion in its infrastructure sector in ten years to be at par with its peers.
She noted that there are other estimates that have put this figure slightly higher and said that the government, in recognition of this is doing its best to close the infrastructure gap as outlined in the Economic Recovery and Growth Plan (ERGP) for 2017-2020.
“However, the government cannot be the sole provider or promoter of infrastructure projects, private sector investment in infrastructure sector is also required. In view of the government’s bid to reverse the current growth trend, diversify the economy and develop infrastructure, there is no better time than now to leverage the capital market for sourcing of infrastructure development financing”, Uduk said.
She further added that the capital market provides an enabling environment for private investments in infrastructure projects.
Uduk stated that SEC was doing its part to foster this through the implementation of the Capital Market Master Plan (2015-2025).
“We believe that the establishment of an active infrastructure funds via the capital market as being pursued by capital market stakeholders would be immensely beneficial in closing the infrastructure gaps in the country.
“The international capital markets are the largest and deepest pool of financing in the world, and in conjunction with local capital markets, which represent an essentially untapped source of funds for infrastructure projects, they can make a huge contribution to economic development, if effective transaction structures are developed”, she said.