2 months ago
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Over six decades after political independence, Nigeria, one of Africa’s largest economies still struggles to provide basic infrastructure for its 206 million people. Most parts of rural and even urban Nigeria still lack adequate supply of electricity, potable water, road transportation and security. Where these elements are present, they are available in so little quantity and quality that frustrates the government’s ambitious goal to lift 100 million Nigerians out of poverty in 10 years.
When the Muhammadu Buhari-led administration crafted the 100-million-in-a-decade plan in February 2021, the country was grappling with a 17.33 per cent food inflation rate, the highest in a decade. More so, youth unemployment was 19.61 per cent, even as terrorist attacks ravaged the country from various fronts; shutting down schools and farming activities in the country’s North-West region. With farmers unable to till their lands, food prices have soared, further tightening poverty’s grip on millions of Nigerians. More than three years later, with a new governing administration in place under President Bola Tinubu; much has not changed. If anything, the country has incurred more debt since that time as its revenue has dwindled from shaky oil prices and the knock-off effect of not-thought-out policy miscalculations.
An earlier PUNCH report in 2022 revealed that debt servicing would cost Nigeria N10.43 trillion by 2025. According to the 2023-2035 Medium Term Expenditure Framework and Fiscal Strategy Paper quoted by the report, this showed an 182.66 per cent increase from the N3.69 trillion budgeted for debt service in 2022. Today, N6.56 trillion is what is budgeted for debt servicing in 2024; a further increase of over 300 per cent. Already, the finance minister has admitted Nigeria’s struggle to service its humongous debt and according to the International Monetary Fund, debt servicing might guzzle Nigeria’s entire revenue by 2026 if the government fails to implement adequate measures to improve revenue generation. Amidst the debt, security and revenue crises stands a towering infrastructural challenge largely triggered by a swelling population.
Electricity, for instance, is in such short supply to the extent that some entire communities are still off the grid. What’s more? The national grid has collapsed on over 200 million Nigerians at least six times so far in 2024. Such blackouts are golden moments for all sorts of crime. Road networks are also a challenge. Even where they exist, banditry has made travelling a suicide mission in most parts of Nigeria’s northern region. Nonetheless, if Nigeria must succeed at the pace it wants, it must rapidly improve on its infrastructure base expansion. But infrastructure does not come cheap. Speaking at a high-level side event during COP 28 in Dubai last year, Tinubu told world leaders that Nigeria needs at least $1.5 trillion in the next 10 years to close its infrastructure deficit and achieve 70 per cent of its National Infrastructure Stock. From the aforementioned debt-servicing hassle, it is clear that the Federal Government cannot fund this alone. A good development on the part of the government is that it is realising the need for partnerships with the private sector.
For years, the Federal Government has explored various arrangements to enable private entities to fund, design, manage and operate public infrastructure for a defined period in exchange for the payment of tolls by users or the government. We call them Public-Private Partnerships. Past and present administrations have been relentless in seeking private funding for its huge infrastructure needs.
On August 23, 2022, former Vice President Prof. Yemi Osinbajo inaugurated the National Council on Infrastructure. The NCI, he said, would bridge the country’s infrastructure gap while widening the frontiers of public-private sector collaboration by providing policy direction on infrastructure matters and driving the creation and sustenance of the expected synergy and linkages between the public and the private sector to enhance the implementation of Nigeria’s infrastructure master plan. Also, a technical working group was set up to provide guidance to the council and advise on all infrastructure-related matters. The NCI came 18 months after Buhari approved the Infrastructure Corporation of Nigeria in February 2021.
In its eight-year fact sheet on the administration, the Presidency said, “The Infrastructure Corporation of Nigeria was established by President Buhari in February 2021, with initial seed capital of N1 trillion, provided by the Central Bank of Nigeria, the Nigeria Sovereign Investment Authority, and the Africa Finance Corporation.
“InfraCorp’s goal is ‘to catalyse and accelerate investment into Nigeria’s infrastructure sector by originating, structuring, executing and managing end-to-end bankable projects in that space.’”
The InfraCorp is expected to mobilise another N14 trillion of debt capital in addition to the N1 trillion equity seed capital. In 2020, the Buhari administration also established the Presidential Infrastructure Development Fund, with more than $1 billion in funding so far. In April 2022, the CBN signed a term sheet with InfraCorp and four independent asset managers to develop the country’s infrastructure. They include Sanlam InfraWorks, African Infrastructure Investment Managers, AAA Consortium, and Chapel Hill Denham. The term sheet is a non-binding agreement outlining the basic terms and conditions under which an investment will be made.
Though the government has made various strides in road, rail, housing, power, digital, oil and gas infrastructure, the journey has only just begun. Experience and studies have shown that clarifying infrastructure plans is just one of many rungs on this ladder. How does the government aim to safeguard its plans against the complexity that comes with the Nigerian space? What can be done apart from setting up committees?
Most governments plan big for infrastructure, but they fall prey to the shadow that comes with going big; complexity. Like a shadow trailing an object under light, complexity accompanies any major infrastructure plan. There’s no avoiding the initial pairing. However, infrastructure managers must identify the areas of complexity or possible complexity, detangle them or manage them along the way. This is crucial because several studies have linked project failure to the complexity and size of multi-faceted infrastructure. Project complexity is three-faced.
Structural complexity is the easiest to spot. It is visible in surface factors such as variety, project size, scope, work pace and level of interdependence of the people or tasks per time. But it does not stop there.
This is complexity powered by change and uncertainty. Projects can get complex when there are changes in requirements by key stakeholders. Also, new processes, regulations, technology, market dynamics or a combination of these can trigger uncertainty.
Complex projects are a battleground of interests. The power dynamics at play in these projects can either steer things forward or backward. In my experience, this is the slyest form of complexity to spot and the most impactful of the three. A project can be socio-politically complex due to its significance or the people, politics and power dynamics within the project team and amongst stakeholders.
As Nigeria plans big for its infrastructure expansion, individuals at the helm of affairs must identify and address these forms of complexity early. Some ways to do this are through early, inclusive stakeholder involvement, open accountability through periodic assessment, prioritising only plans that are in line with InfraCorp’s original vision and working with the right mix of team experts.
Ajia is an infrastructure advisory and project strategy consultant
