World Bank warns that Nigeria risks having a $3trn infrastructure gap by the year 2052

WORLD Bank officials have warned that Nigeria is facing the risk of having a $3trn infrastructure gap by the year 2052 if something is now done quickly to address the current lack of social amenities.

According to the African Development Bank, Nigeria has an annual $100bn infrastructural development gap and the country needs to attract foreign direct investment to fund this. Now, the World Bank has described the level and quality of infrastructure in Nigeria as low despite the federal government’s claim of borrowing to finance future development.

In its Nigeria public finance review report, the World Bank said that Nigeria’s physical infrastructure gap would likely reach $3tn in the next 30 years.  It added that Nigeria’s development outcomes were among the lowest globally, which indicated high public spending needs.

“The level and quality of Nigeria’s infrastructure quality is low, with the country ranked 132 out of 137 countries for infrastructure in the 2018 Global Competitive Index. Nigeria’s physical infrastructure gap is estimated to reach $3tn over the next 30 years.

 “At the current rate of expenditure allocation, it would take 300 years to close the country’s current infrastructure gap. Closing Nigeria’s infrastructure gap would cost at least 4% of GDP growth per year,” the report added.

In September 2021, information minister Alhaji Lai Mohammed, said the federal government was borrowing to build world class infrastructure and not for recurrent expenditure. Recently in October, President Muhammadu Buhari also defended his government’s borrowing, describing it as a necessary step to provide the infrastructure that would expand opportunities for the growth of the Nigerian economy.

In November 2021, the World Bank had warned the Nigerian government against financing deficits by borrowing from the Central Bank of Nigeria (CBN) through the Ways and Means Advances, saying this put fiscal pressures on the country’s expenditures. Despite warnings from experts and organisations, however, the federal government had kept borrowing from the CBN to fund budget deficits.

Development economist Dr Aliyu Ilias, criticised the government for its constant reliance on borrowing, saying was unhealthy for the economy. He urged the government to seek better ways of generating revenue rather than persistently borrowing from the CBN.