The Central Bank of Nigeria (CBN) took longer time than expected to distribute the first seed cash of N1 trillion to the four fund managers of the company’s assets.
This has prevented the Infrastructure Corporation of Nigeria (InfraCorp) from completely launching it.
The four selected fund managers must each receive N250 billion.
The creation of an infrastructure business with a public-private partnership style was approved by the federal government in 2021.
The proposed establishment is anticipated to draw private sector involvement in the country’s effort to close the infrastructure gap required for growth across all economic sectors.
What You Must Understand
The company was supposed to start up in the third quarter of 2021, but that hasn’t happened yet.
The four fund managers chosen to run the business were Chapel Hill Denham, Sanlam InfraWorks, Africa Infrastructure Investment Managers, and Triple-A.
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There was a partnership between ARC Asset Management and Afrinvest Asset Management Africa and also Fund Partners.
The obvious infrastructure shortfall has slowed down economic growth and development.
Nigeria has consistently maintained a meager allocation for funding infrastructure in its annual budget.
Economic analysts and stakeholders are still very concerned about Nigeria’s expanding infrastructure deficit.
This is because it is one of the biggest barriers to efficient corporate operations and capital inflows into the nation.
The largest economy in Africa has had a limited ability to grow over the years due to the lack of investment in physical and social infrastructure.
This has prevented it from fully utilizing its enormous natural and human resource base to achieve broad-based, sustainable, and inclusive growth.
The World Bank predicted that Nigeria will require about US$3.00 trillion in 2021 to make up for its infrastructure shortfall.
We emphasize that we believe the concept of InfraCorp is admirable.
It adheres to the greatest infrastructure finance model in Nigeria, one that eliminates red tape and maximizes efficiency.
The Best Strategy
Given Nigeria’s current precarious economic situation and high borrowing costs, working with the private sector to close the country’s growing infrastructure gap seems to be the only practical solution.
However, since the future administration will likely be responsible for putting this notion into action, we think a lot of work needs to be done to prevent the concept from being overlooked.
Success depends on having enough money and overseeing approved initiatives all the way through.
The CBN governor, Godwin Emefiele has mentioned in earlier reports that numerous local and foreign private fund managers have expressed interest in taking part in the project.
