Tinubu approves the establishment of an annual $25bn infrastructure development fund

PRESIDENT Bola Tinubu has approved the creation of a  Renewed Hope Infrastructure Development Fund to generate capital to bridge Nigeria's $25bn per annual infrastructure funding gap.

Woefully lacking in the provision of critical structure, Nigeria is way behind in terms of possessing railway networks, power plants, primary healthcare centres, social housing units and water treatment plans. With an annual budget of just $30bn, some 70% of which goes in recurrent spending anyway, the federal government is badly cash-strapped and lacking in the capacity to rise of to these challenges.

Information minister Mohammed Idris, said that this new fund will be domiciled in the presidency. He added that the fund became necessary given Nigeria’s current infrastructure gap, which will be short of a total of around $878bn between 2016 and 2040.

Mr Idris said: “Now, there is a study that was made that said Nigeria will require about $878bn between 2016 and 2040 to bridge its infrastructural deficit. What that means is that from 2016 to 2040, about $25bn will be required annually to bridge that infrastructure deficit."

Zacch Adedeji,  the chairman of the Federal Inland Revenue Service, said the fund would focus on road, rail, agriculture, ports and aviation. He explained that the fund will be launched only after the minister of budget and economic planning, Abubakar Bagudu, prepares a supplementary budget to accommodate the new spending.

Mr Adedeji said: “Our key strategic focus, for now, will be on road infrastructure, rail infrastructure, agricultural infrastructure, port revitalisation and aviation enhancement. We believe this vehicle will be a major outside-the-box solution to our infrastructure gap and we believe, hopefully, by the special grace of Almighty God, that Mr President will launch this fund after the minister of budget and economic planning has done the supplementary budget to take care of all these critical projects."

Ajuri Ngelale, President Tinubu's spokesman, stated the fund would be invested in critical national projects that would, among other things, promote growth, enhance local value-addition, create employment opportunities and stimulate technological innovation and exports. He added that it would establish an innovative infrastructure investment vehicle to attract and consolidate capital, serving as a dynamic driver for economic advancement.

Mr Ngelale said: “We will execute strategic and meticulously chosen national infrastructure projects across several key sectors, including road, rail, agriculture (irrigation, storage, logistics and cold chain), ports and aviation, among others. We will also efficiently utilise and aggregate accessible low-interest loans such as concessionary loans and Eurobonds, supplemented by the procurement of other favourable financing options, in addition to budgetary allocations.”

On agricultural infrastructure and food security, the presidency said the emphasis would be on the development of robust agricultural infrastructure networks. This will include the establishment of national food storage facilities, integrated irrigation systems, ranching for animal husbandry and the enhancement of agricultural logistics and distribution.

On port revitalisation, the strategic thrust revolves around the rejuvenation of port facilities and associated infrastructure to streamline operations and enhance the ease of doing business. According to the presidency, by modernising port facilities and implementing advanced monitoring systems, the goal is to optimise efficiency, attract investments and bolster Nigeria’s position as a regional trade hub.