| The general state of infrastructure across the | | | | workforce of uncharted economic potential. The |
| African continent and especially sub-Saharan Africa is | | | | country's thriving informal sector, estimated to be as |
| acutely discomfiting. With the exception of South | | | | high as 75% of the total economy, also conceals |
| Africa, the continent's largest economy, the entire | | | | tremendous possibilities for inclusive growth. Rapid |
| region is bogged down by severe infrastructure | | | | SME development has hence been the mainstay of |
| deficits that have frustrated development | | | | successive governments since the reinstatement of |
| programmes and marred growth prospects. The | | | | civilian rule in 1999. Nigeria's ability to kick-start an |
| Southern African Development Community (SADC) | | | | enterprise revolution that will fundamentally alter its |
| countries have been relatively better off in this | | | | macroeconomic imbalances remains the quintessential |
| regard with their efforts to drive area-wide | | | | challenge of its 2020 goal. |
| development through trade agreements, resource | | | | Infrastructure development is clearly going to be the |
| pooling and multi-nation collaborations. Western Africa, | | | | first building block in this endeavour, and ground |
| on the other hand, has been bereft of similar benefits | | | | realities are pretty harsh as present conditions go. For |
| due to complex past and present exigencies. As a | | | | Nigeria, the larger impact of infrastructure deficits is |
| result, the economic potential of this region has | | | | the high cost of doing business, for large corporations |
| hardly been scratched. | | | | and small enterprises alike. Lawmakers need to draw |
| In June this year, the World Bank approved a $1 | | | | up a comprehensive blueprint to reverse this trend in |
| billion loan for Nigeria to fund multiple development | | | | a time-bound manner. The following are two key |
| programmes including expansion and enhancement of | | | | aspects in this consideration:o The whole of Western |
| the country's massively deficient power sector. An | | | | African receives very nominal foreign private |
| amount of $200 million was earmarked for | | | | investment in infrastructure due to a slew of reasons |
| investment in networking and technical upgrades to | | | | ranging from high foreign exchange risks to low |
| improve electric supply. While this concessionary, | | | | creditworthiness. The region's subdued ability to raise |
| interest-free funding comes as an undoubtedly | | | | debt and inclination towards infrastructure sectors |
| welcome development, it amounts but to a tiny | | | | with limited regulatory intervention are further |
| fraction of Nigeria's overall investment requirement in | | | | obstacles. Nigeria needs to lead the way in enhancing |
| infrastructure. In August 2008, the Nigerian Debt | | | | access to equity debt as a means of attracting |
| Management Office (DMO) revealed that the country | | | | projects with viable private participation.o The ability |
| needed at least $100 billion in investment to develop | | | | of local finance markets to fund infrastructure |
| four key infrastructure areas - power, rail, roads and | | | | projects is very low across the continent. Local |
| oil & gas. The figure was calculated to align with | | | | long-term local financing is almost non-existent except |
| the ambitious national goal of taking Nigeria to the | | | | in South Africa, which has been successful in |
| top-20 world economies by 2020. Of the four | | | | developing an indigenous capital market for consistent |
| sectors mentioned, power alone would require an | | | | funding on convenient terms. The absence of similar |
| estimated investment of between $18 and $20 billion | | | | capacity in the rest of Africa means most of it is |
| over the next ten years. With a current installed | | | | dependent entirely on grants-in-aid and soft loans |
| capacity of 6,000 MW against the total requirement | | | | from international development agencies. |
| of 10,000 units, only 40% of Nigerians currently have | | | | For developing African economies, increasing foreign |
| access to electricity. | | | | investment on infrastructure while simultaneously |
| The collapse of basic infrastructure and social | | | | developing avenues for credible local finance is a |
| services was set off in the 1980s, after Abuja's | | | | daunting task. The current Nigerian government under |
| unhealthy dependence on oil exports decimated its | | | | President UM Yar'Adua acknowledges the challenge |
| agriculture and light manufacturing sectors. The static | | | | by listing infrastructure development as a cornerstone |
| oil economy wiped out traditional and emerging | | | | component of the 7 Point Agenda for realisation of |
| livelihoods, creating rampant unemployment, poverty | | | | the 2020 goals as well as the Millennium Development |
| and degraded living standards. By 2002, per capita | | | | targets. Some recent initiatives in this connection |
| income was below the level for 1960, when Nigeria | | | | include the setting up of a federal mortgage bank, a |
| gained independence from British rule. In terms of | | | | housing authority and a national road maintenance |
| infrastructure decline, power happens to be the most | | | | agency. |
| hardly hit, but the government readily admits severe | | | | That infrastructure will be the prime driver of all |
| shortfalls in a many other areas as well. For instance, | | | | socio-economic development in Africa is given. What |
| the rail network is in shambles and today accounts | | | | remain unclear are the ways and means that individual |
| for only 1% of national transportation1. The port | | | | nations employ, and the ground effectiveness of |
| service likewise suffers severe bottlenecks and | | | | such measures beyond official statistics and |
| inadequate capacity optimisation. The over 100,000 | | | | proclamations. Nigeria has the unique opportunity not |
| km long road network is in disrepair at best and | | | | only to reverse decades of economic stagnation but |
| barely usable at worst. | | | | also to hold up an effective model for accelerated |
| Because of Nigeria's strategic location and the | | | | growth to the rest of the continent. The success of |
| abundance of its natural resources, infrastructure | | | | its long-term ambition gathers wider significance |
| development in the country has pan-African | | | | because it is bound to have a gradual spill-over effect |
| relevance. The human capital of 148 million that | | | | on its immediate geography. |
| makes Nigeria the most populous African nation is a | | | | |