FINANCING THE PLAN

Nigeria requires a significant increase in the infrastructure investment to meet its development needs. Implementation of the master plan will require a total investment of USD 3.0 trillion over the next 30 years. For the first five years of the plan, annual investments in infrastructure need to rise from the current USD 9-10 billion (about two per cent of GDP) per year to an average of USD 33.2 billion (about 5.4 per cent of GDP) annually during 2014–18.

Financing this investment will require both public and private sector participation. The private sector is currently estimated to account for ~46 per cent of the infrastructure investments in Nigeria. Given the on-going privatisation plans, most notably in the power sector, the share of private sector’s investments is estimated to increase to ~48 per cent by 2018 . The private sector share of spend primarily accounts for assets that are fully owned and financed by the private sector. Examples of this include the base stations owned by telecom providers, and privately-owned schools and hospitals.

The remaining 52 per cent of the required infrastructure investment (USD 86billion) for the first five years will need to be financed from a combination of public and private sources. There are four primary options available for financing these investments: 1) Government budgets (federal and state), 2) public debt, 3)

 

other public sources (e.g., the SWF, public pension funds), and 4) public private partnerships (PPPs) or further privatisation. This means that over the next five years, the total of USD 86billion would need to be financed through a combination of these sources.