Building and maintaining sound national infrastructure comes at a high cost. However, these investments substantially and sustainably increase a country’s competitive strength – especially if coming from a relatively low base. With economic performance more and more closely tied to global competitiveness, building infrastructure that meets global standards has become a primary requirement for achieving ambitious growth targets.
In contrast to international benchmarks of 70 per cent, Nigeria’s core infrastructure stock is estimated at only 20-25 per cent of GDP – the equivalent of less than USD 100 billion in 2012. This low value has been historically driven by low public and private spending on infrastructure. Nigeria currently spends USD 10 billion per annum on infrastructure, of which about 50 per cent is funded by the private sector. The bulk of the spending is concentrated in ICT (28 per cent), transport (23 per cent), and energy (19 per cent). While the current spend on infrastructure is low, it has increased over the past three years.
Nigeria’s infrastructure has long been a bottleneck for economic growth. It is underdeveloped compared to that of other fast-growing emerging countries. Road density in Nigeria, for example, is only about a fifth of that India. The Nigerian population’s access to sanitation and mobile telecommunications both compare unfavourably with Brazil and South Africa (mobile penetration is about half and access to sanitation is about 40 per cent of these countries’). Nigeria’s five hospital beds per thousand people ratio is also lower than India’s (at nine) and much lower than South Africa’s 28 beds per thousand people.
The effect of weak infrastructure is most striking in the energy sector – Nigeria’s per capita power consumption of 136 kWh per annum is less than 3 per cent of South Africa’s 4,803 kWh.