Low tax revenues, huge obligatory spending and higher local currency debt amounting to 350 per cent have been adduced among reasons Nigeria has low investment in infrastructure development.
Decrying the situation, renowned Chartered Accountant and current Chairman of the Lagos State Economic Advisory Committee Mr. Bode Agusto, pointed out that years ended 2016, Nigeria only invested 2.1 per cent of the national income in infrastructure, while Ghana, Ivory Coast and Kenya invested 5.3 per cent, 6.5 per cent and 7.5 per cent respectively.
Speaking at International Real Estate Federation (FIABCI) Nigeria’s forum in Lagos, he noted that the Nigerian population is growing at exponential rate without any correspondent investment in infrastructure to match the growth.
He wants government to embrace Public-Private Partnership model for infrastructure development.
According to Agusto, the rapid population growth would require huge investment in infrastructure but that the nation only contributed low investment in it.
“According to population pyramid.net, in 1960, the population of Nigeria was 46 million, the United Kingdom (UK) was 52 million; in 2015 Nigeria was 182 million while the UK was 65 million and in 2070, Nigeria will be 550 million while the United Kingdom will be only 80 million,” he said.
Currently, Nigeria has $3trillion infrastructure deficit and, according to the Minister of Power, Work and Housing, Mr. Babatunde Fashola, the nation would need N1.7 trillion to deliver 206 federal roads covering over 6,000 kilometres with contract value at over N2 trillion.
The renowned accountant stated that principal areas in Nigeria yawning for significant investment include the national grid; railway tracks, rolling stock and inter-city highways and bridges. However, he pointed out that government was unable to make the investments required in these sectors by acting alone, calling for Public-Private Partnership to reduce infrastructure deficit.
According to him, revenue generated from tax by government was too low to invest maximally in infrastructure provision, pointing out that the non-oil tax as a percentage of national income was about 4 per cent; whereas “it is nine per cent in Angola, 15 per cent in Ivory Coast, 16 per cent in Ghana and 17 per cent in Kenya.”
Agusto also lamented on the financial position of a lot of states, which according to him was not significantly better than that of the central authority. ‘In summary, Government revenue is limited, obligatory spending is higher than these revenues and leverage is too high,” he said. Without these constraints, he said the World Bank has recognised that large financing gaps exist in the area of infrastructure finance and that traditional funding could not cover the long-term needs of most countries.