The Minister of Works, Mike Onolememen has identified physical infrastructure, such as roads, houses, power and water as essential for the growth of the African economy, without which the economy will stagnate.
The Minister of Works, Mike Onolememen revealed this in a goodwill message to the 2013 International All Africa Youth Reunion/Camp at the Grace Point Hotel in Abuja with the theme: Africa Youth and Entrepreneurship, where he said that infrastructure development and economic growth are mutually reinforcing, as infrastructure development plays a vital role in wealth creation.
The message entitled: "Funding Infrastructure Development in Africa: Nigeria as a Case Study", also identified good infrastructure as "critical to the overall development of the Nigerian economy, which in turn impacts the standard of living of Nigerians".
The Minister said that though the infrastructure deficit is large and affects every sector and that investment in the road sector alone requires at least construction of 14,000km of new roads annually for the next seven years, apart from maintaining and rehabilitating the existing network as a matter of routine in order to adequately support economic growth and meet vision 20:20:20; adding that these will require the average annual expenditure on roads to increase seven fold to nearly N750billion.
Onolememen expressed that in view of central place that infrastructure development occupies in President Jonathan's quest to transform the nation, the country has just completed the development of a National Integrated Infrastructure Master Plan, which requires ten of trillions of Naira to implement.
He stated that Government alone cannot fund this huge portfolio due to the limited financial resources available and increased competition for available infrastructure funds; thus Government is exploring new ways of bridging the infrastructure funding gap.
The Minister's words: "Furthermore, in order to attract private finance, the Federal Government took steps not only to ensure that Direct Foreign Investments (DFIs) and Public Private Partnerships (PPPs) thrive in the development of infrastructure and the real sector in the country but also guarantee transparency and accountability in the process." He identified some of the notable steps as the enactments of the followings: Infrastructure Concession and Regulatory Act (ICRC), 2005, Power Sector Reform Act 2005, Public Procurement Act 2007 and Mining Act, 2007.
Mike Onolememen said that though the President Jonathan-led Federal Government had embarked on major sector reforms in Roads, Housing, Maritime, Aviation, Agriculture, Solid Minerals, Power, Oil and Gas, etc, which will ensure enhanced and sustainable financing of infrastructure development in Nigeria; adding that similar paths were taken by India, Malaysia and many other countries that have successfully turned around infrastructure development and consequently their economies.
The Minister was of the opinion that 'User pays' principle will inevitably find its way into the infrastructure sector if the nation is to attract private investments in the development of infrastructure; adding that evidence abound that Nigerians are prepared to pay for good service.
Also, he referred to a number of Public Private Partnership projects embarked upon by the Federal Government such as the Second Niger Bridge, Murtala Muhammed International Airport, Apakun/Oshodi Expressway in Lagos as means of delivering critical national infrastructure.
The Minister further stated that the Government had not discounted other means of financing the nation's infrastructure as there have been improvements in securing multi-lateral financing as well as bi-lateral financing where the loan rates are competitive, assuring that the nation must ultimately strengthen and build financing capacity through our domestic financial institutions and banks in order to ensure sustainability.
Whilst concluding his address, Onolememen said that the Federal Government recognises the need to bridge the infrastructure gap in the country which requires attitudinal change, including bold and courageous actions by both the Executive and the Legislature to unleash uncommon transformation in the country.
The Works Minister recommended that there is a need to declare emergency in the infrastructure sector; establish Infrastructure Development Fund (IDF); and further recommended that the National Assembly should pass appropriate legislation establishing the IDF and the implementation of the NIIMP from the first line charge over a 10-year period.
He also recommended better corporate governance that requires an amendment to the Company and Allied Matters Act that allows companies to contribute 3-5% of their pre-tax income to the IDF.
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