Managing Director, Ecobank Nigeria, Patrick Akinwuntan has advocated a synergy between financial institutions and private investors to address infrastructure deficit in the country.
Akinwuntan in a presentation titled ‘Transportation Infrastructure Development Financing In Nigeria’ delivered at the Nigerian Institute For Transport Technology (NITT) 2021 Transport Technology Conference in Abuja, noted that given the bulk of activities across the infrastructure project lifecycle in Nigeria, there is a need for a synergy between the private sector who are major project sponsors and financial institutions in harnessing the desired value across the ecosystem.
The Ecobank Nigeria Managing Director noted that though Nigeria has made moderate progress in terms of infrastructure development regarding improved access to finance, strong telecom penetration and moderating power production, there is limited productivity in the transport sector when compared to other sectors and regions.
He lamented that private sector involvement in infrastructure development is constrained by selection of low-impact projects; weak feasibility study and business plan; delays in obtaining licenses, approvals and permits, and inability to secure guarantees.
Mr Akinwuntan submitted that the attractiveness of the transport sector must be compelling to attract the required funding, noting that there is high investors’ appetite for Africa as 72 per cent of available funds for African infrastructure investment are from the private sector.
According to him, “The government in partnership with the private sector recently launched Infra-co, an infrastructure company with initial seed capital of $2.4 billion (N1trillion and is expected to grow its capital and assets to $36 billion (N15 trillion) over time to fund public projects like roads, rails, and power.
“The start-up funding will come from the CBN, the Nigerian Sovereign Investment Authority, and the Africa Finance Corporation. Governance, operations, returns and valuation to be driven by global best practice. This is definitely a right step in the right direction.
“Also, the Nigerian Banking industry has been showing consistent support for the Transport and Construction sector, evidenced by continuous growth in credit allocation. There are major sources for transportation infrastructure funds such as Green bond pools, Diaspora Naijaworld Infrastructure Bonds, Technology and telecoms through right of way. International chains/brands funds can also be accessed via private sector financing.”
He shared selected Ecobank infrastructure participation success stories across the continent such as Asky Airlines, the multinational passenger airline serving west and central Africa; road infrastructure in Cote d’ Ivoire; port infrastructure in Ghana; telecommunications Infrastructure in Senegal and power infrastructure in Cameroun, among others.