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AfDB to drive private sector investments in Nigeria’s economy

Oluwasina Phillip

The African Development Bank on Tuesday said it would work with like-minded development partners and financial institutions to deploy a suite of instruments, including direct lending, equity participation, de-risking facilities, and the platform of the Africa Investment Forum platform to support the government, and other key stakeholders, implement bold and innovative approaches to drive private sector participation and investments in the economy.

It also said the construction of the Lagos-Ibadan highway which is expected to commence from next year would unlock 85 per cent of trade within the ECOWAS sub-region.

The AfDB President, Dr. Akinwumi Adesina, said these on Tuesday as a panelist at a one day investors Webinar to showcase the investment opportunities from the Federal Government of Nigeria’s reform and privatization activities.

He said while the Federal Government had spearheaded various reforms in the banking sector that have enhanced the resilience of the financial system, there is need to stay the course in completing the bold reforms initiated to restructure the energy sector.

Nigeria’s infrastructure deficit is one of the main constraints to industrial development and national competitiveness.

Estimates indicate that Nigeria’s infrastructure constraints cost the country around four per cent of its yearly Gross Domestic Product growth.

Given the huge amounts needed which is about $100bn annually for the next 30 years, he said time has come to create an enabling environment for Public-Private Partnerships to close Nigeria’s infrastructure gap.

Adesina who was represented by the Director-General, AfDB Group, Nigeria Country Department, Mr. Lamin Barrow, noted that this why the AfDB is supporting the government’s efforts in addressing the infrastructure deficit in Nigeria through development of both national and regional infrastructure.

In the energy sector, he said the AfBD’s support will help improve access and reliability of electricity supply by attracting private sector participation.

According to him, the $256m and $200m financing respectively for the Nigeria Transmission Expansion Project (NTEP-1) and the Nigerian Electrification Project (NEP) will contribute to strengthening of the transmission network and promote off-grid solutions.

In the transport sector, he explained that the bank’s $430m support for the Enugu-Bamenda Road linking Nigeria and Cameroun, expected to be completed this year, will provide a gateway for enhanced trade between West Africa and Central Africa.

He added, “We are working closely with the ECOWAS Commission and the concerned countries to finalize the feasibility studies for the landmark Abidjan-Lagos Highway.

“We expect the construction of the corridor to commence next year. This highway will link 85 per cent of the trade volumes in ECOWAS.  

“We also supporting the rollout of new flagship programs such as the Special Agro-Industrial Processing Zones (SAPZs) and Nigeria Innovation Program (Digital Nigeria) to unleash the potential of the economy. These will be complemented by enhanced policy dialogue with a view to consolidate Nigeria’s strategic position as the bulwark for the regional economy.”

Attracting private sector participation is critical for mobilizing investment resources and ensuring sustainable operation and maintenance of public infrastructure assets.

To this end, the AfDB DG said governments should put in place adequate regulatory frameworks to treat infrastructure as an asset class and view privatisation as an opportunity to optimize underperforming assets.

“Privatisation and commercialisation of public enterprises should therefore be more than just a transaction but an institutionalized mechanism with a long-term perspective.

“They represent a new way of life/doing business to accelerate achievement of the SDGs, an inclusive society, and as tools for building dynamic and competitive economies,” he added.

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