Infrastructure connotes hard structures like roads, buildings, schools, bridges, hospitals and telecommunication masts; and soft structures like policies, principles and administrative services that nations depend on for operation. Despite Nigeria having data integrity doubts, her infrastructure is seen as a sure way to its development. For example, the introduction of mobile telephony has tremendously improved commerce, employment and communication in Nigeria. Infrastructure has made a net contribution of around one percentage point to Nigeria’s improved per capita growth performance in recent years, in spite of the fact that unreliable power supply, bad roads and insecurity held growth back in the last decade.
Raising Nigeria’s infrastructure endowment to that of the middle-income countries could boost annual growth by around four percentage points, wrote Foster and Pushak in a 2011 publication titled, “Nigeria’s Infrastructure: A Continental Perspective”. The African Development Bank (ADB) has made infrastructure development a cornerstone in its development agenda with regional member countries (TMSA, 2012: Governance and infrastructure in the continent). The bank recognizes that lack of adequate social and economic infrastructure is one of the key constraints to short-, and medium-, term poverty reduction in Africa, and has thus been a major force in private and public sector infrastructure development through the provision of financial and technical resources. At the same time, the bank recognises the increasing importance of good governance for infrastructure development and has made good governance an imperative in its lending and non-lending operations.
There have been considerable changes in the delivery of national infrastructure services across Africa. While Nigeria has improved its telecommunication infrastructure situation, it has not improved in other areas like health, education, airports, electricity, housing and transportation. However, performance in terms of infrastructure service delivery and quality continues to vary across countries. Infrastructure is the medium of production of goods and services and forms the national asset of any nation. According to the 2009 Kathmandu Final Workshop Report, infrastructure can help solve four problems: social; health and environment; development; and economics.
A region’s infrastructure network, broadly speaking, is the very socio-economic climate created by the institutions that serve as conduits of trade and investment. Some of these institutions are public, others private. In either case, their roles in the context of integration are transformative, helping to change resources into outputs or to enhance trade by removing barriers. Therefore, an improvement in regional infrastructure is one of the key factors affecting the long-term economic growth of a region. The linkages between infrastructure and economic growth are multiple and complex. Not only does infrastructure affect production and consumption directly, it also creates many direct and indirect externalities.
It involves large flows of expenditure, thereby creating additional employment. Studies have shown that infrastructure can have a significant impact on output, income, employment, international trade, and quality of life. Infrastructure development, like road and rail infrastructure, can reduce transit stress and promote good health. It can also reduce the level of crime. Infrastructure has always played a key role in integrating economies within a region. Well developed and efficient infrastructure is essential for a region’s economic development and growth. In a dynamic concept, infrastructure is seen as a regional public good that moves factors of production within and across countries, thus helping the region attain higher productivity and growth.
Nigeria’s widening infrastructure deficit has been a frequent discussion over the years as it is widely believed that the weak stock of infrastructure investments is one of the biggest challenges to the ease of doing business. Nigeria’s infrastructure stock of about 25 percent of gross domestic product (GDP) remains far below the 70 percent international benchmark, according to a 2017 report by the International Monetary Fund (IMF). Nigeria’s Minister of Finance, Budget and National Planning, Mrs. Zainab Shamsuna Ahmed, stated that the federal government will require about N36 trillion (about $60 billion) annually for the next 30 years to effectively tackle Nigeria’s infrastructure challenges. The minister further stated that with the shortfall in oil revenue in recent times, it is difficult to address the infrastructural deficit plaguing the nation.
Capital expenditure in 2018 stood at N820.6 billion (as at 14th December 2018, according to the budget office of the federation), far below the budgeted sum of N2.9 trillion, translating to a performance ratio of just 28.6 percent. Infrastructure financing plays a critical role in promoting economic growth, improving standard of living, poverty reduction, enhancing productivity and in improving competitiveness. It also contributes to environmental sustainability, write Obinna Chima & Nume Ekeghe, in ThisDay of January 6, 2020. And according to a 2019 Statista report, as a percentage of the country’s GDP, China’s annual average infrastructure spending is one of the highest in the world at 8.3 percent. Public infrastructure provision is the best way of bridging the gap between the poor and the rich in any community and of ensuring commerce development.
Studies have shown that the causes of poor economic growth and development in Nigeria are:
Low capital budget provision and execution: Low capital budget execution is also an issue across the infrastructure sector. According to Mr. Babtunde Fashola, minister of works and housing, the federal government owes contractors N392 billion and it proposed N276 billion for its ongoing 711 road projects in the 2021 budget, The Punch, reported in 2020. The government actually needs N7 trillion to complete its current undertakings. In the past five years’ budgets, capital expenditure performance was below 30 percent.
High business-environment risk: The business-environment risks in Nigeria are very high. Foreign investors who could invest highly in the provision of scarce infrastructure are wary of these risks. Apart from the security and safety risks and high rate of road accidents, the October 2020 “END SARS” civil unrest under the auspices of secret promoters and the guise of “peaceful protest” in thirteen out of thirty six states and the Federal Capital Territory (FCT) is unfriendly to infrastructure development by private sector and foreign investors. The incessant strike by Academic Staff Union of Universities in Nigeria (ASUU) is also inimical to direct foreign investment.
Corruption: According to Transparency International (TI) Global Corruption Report 2005, “corruption undermines economic development.” Peter Eigen, the chairman of Transparency International, stated that corruption in large-scale public projects is a daunting obstacle to sustainable development. When the size of a bribe takes precedence over value for money (vfm), the results are shoddy construction and poor infrastructure management. According to Abimbola Ayobami in Premium Times, November 24, 2012, “an estimated 11,886 federal government projects were abandoned in the past 40 years across Nigeria. Despite its enormous array of resources, the Nigerian economy has witnessed a period of stagnant growth. This has been partly blamed on corruption (Dahida D. Philip & Akangbe Oluwabamidele Moses, 2013, in Corruption as a Bane for Under-development in Nigeria).
To be continued next week
