VICTOR OGIEMWONYI
Victor Ogiemwonyi, a retired investment banker, is a former Governing Council member of the Nigerian Stock Exchange (NSE), now Nigerian Exchange Group (NGX Group). He sent this contribution from Ikoyi, Lagos. He can be reached via comment@businessamlive.com
The urgent need for large-scale infrastructure development in Nigeria is undeniable. However, no budgetary allocation or borrowing strategy alone can adequately address this growing demand.
Nigeria is at a crossroads — our population is booming, yet our infrastructure remains woefully inadequate. We need everything: roads, railways, airports, seaports, electricity, hospitals. Unfortunately, our development planning consistently falls short of meeting our needs, stunting economic growth.
For years, Nigeria’s economy has grown at an average of less than five percent (5%), while some estimates put our population growth at 6-7 percent. If this trend continues, disaster is imminent. By 2050, we are projected to be one of the three most populous countries in the world, yet our standard of living continues to decline. Overcrowded airports and public transport, unreliable electricity, and a struggling industrial sector are just some of the visible consequences of our infrastructure deficit.
Despite successive governments’ promises to improve infrastructure, progress remains slow. The reality is that as our population grows, so does the demand for infrastructure, and traditional financing methods will never be sufficient to keep pace.
A market-driven approach is urgently needed — one that positions the government as a last-resort guarantor rather than the primary financier.
Government budgets should focus on social infrastructure like healthcare and education, while commercially viable projects should be left to the private sector.
We’ve seen this model work in Nigeria’s banking and telecommunications sectors. Neither industry relied on massive government funding; instead, clear regulations were established, and private investments drove their rapid development. Today, both sectors thrive, creating jobs and enabling economic growth.
The same principle can apply to infrastructure. Nigeria’s large population guarantees demand, making infrastructure projects financially viable over time. The key is creating an investment-friendly environment with clear regulations, competent regulators, and a framework that attracts long-term investors.
Under President Jonathan’s administration, Nigeria developed a comprehensive national railway plan that won a PwC award for one of Africa’s best infrastructure plans. However, poor follow-up and the subsequent administration’s reliance on budget allocations and borrowing derailed its execution. Despite President Buhari’s personal commitment to railway development, the lack of strategic financing ultimately led to failure.
Instead of relying on public funds, the plan should have been opened to investors through concessions, allowing them to fund specific routes in exchange for commercial incentives. Proper regulation would have ensured fair pricing and service quality. Had this approach been adopted a decade ago, Nigeria’s rail network could already be fully operational, driving economic growth, job creation, and urban development along key corridors.
Another example of a missed opportunity is the Lagos-Calabar coastal road. This project could have been structured as a self-financing initiative requiring no government funding.
A better approach would have been:
Developing a master plan and inviting investors to bid on construction and operating rights.
Offering a concession that grants investors a designated commercial zone — such as 2 km of land on both sides of the highway — for real estate, retail, and advertising, generating additional revenue streams beyond tolls. And in cases, providing a sovereign guarantee against future expropriation, to assure investors of long-term security.
By leveraging these commercial incentives, the project could have been entirely privately funded, freeing up trillions of naira for critical sectors like education and healthcare. A well-educated and healthy population is an invaluable national asset, yielding long-term economic benefits.
Nigeria must rethink its approach to infrastructure financing. Our large population is not just a challenge — it’s an economic opportunity. By adopting a commercial investment model, we can unlock the private sector’s potential, accelerate development, and finally escape the infrastructure deficit holding us back.
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