Financing Infrastructure for Economic Transformation

Report
FINANCING INFRASTRUCTURE
FOR ECONOMIC
TRANSFORMATION
BY
DR. YERIMA LAWAN NGAMA
HON. MINISTER OF STATE FOR
FINANCE
AUGUST 5, 2013
Theme and Topic
 The Theme ‘Financing Infrastructure through
the Capital market’ is apt as it directly touches
on one of the key sources of financing
infrastructure to actualize the Transformation
Agenda.
Topic ‘Financing Infrastructure for
Economic Transformation’ also considers
other various sources of funding infrastructure
to realize the Transformation Agenda. Hence
this presentation will provide a general
background to today’s discourse.
 The
T/AGENDA, V20: 2020 & NIIMP
NIGERIA VISION 20: 2020
FIRST NATIONAL
IMPLEMENTATION
PLAN 2010 - 2013
SECOND NATIONAL
IMPLEMENTATION
PLAN 2014 - 2017
THIRD NATIONAL
IMPLEMENTATION
PLAN 2018 - 2020
FG TRANSFORMATION
AGENDA 2011 - 2015
NIIMP 2014 - 2043
VISION 20: 2020
A long term plan for stimulating Nigeria’s
economic growth and launching the country
onto a path of sustained and rapid socioeconomic development. Nigeria is expected to
be among the top 20 economies in the world
with a minimum GDP of N144 billion ($900b)
and a GDP per capita income of no less than
N640,000 ($4,000) per annum by 2020.
TRANSFORMATION
AGENDA
It is a medium term economic
transformation agenda for realizing
the Federal Government’s economic
growth agenda for 2011 -2015
TRANSFORMATION AGENDA
 The Priority Areas of the T/A are:
i. Physical Infrastructure
ii. Human Capital Development
iii. Governance
iv. Real Sector Development
The Objectives of the Agenda are:
i. Job Creation
ii. Strong and Inclusive Growth
iii. Well-being of Nigerians
TRANSFORMATION AGENDA
 Key Outcomes of the Transformation
Agenda:
i. Jobs
ii. Poverty Alleviation
iii. Better Resource Management
iv. Developing Institutions
v. Sustained Economic Development
National Integrated Infrastructure
Master Plan (NIIMP)
It is the capital allocation framework,
which identifies the required
investments to bring infrastructure in
Nigeria in line with the country’s long
term growth aspirations.
Financing Infrastructure
The Investment Requirement to achieve the
objectives of the various Development Plans are
as follows:
 Transformation Agenda will require N25.7
Trillion .
 Phase One of the Master Plan (2014 to 2018)
will require N20.32 Trillion.
 V2020 will require total investment of N32
Trillion.
 National Integrated Infrastructure Master Plan
will some
require
N464
Hence
kind
of Trillion
acceleration of investment is
envisaged after 2020. Obviously this is hinged on a
vibrant Private Sector led economy.
TRANSFORMATION AGENDA
Gross Investment in Infrastructure
Gross Investment Total
% of Total
Public Sector
Private Sector
Total
56.82%
43.18%
100%
14.59Tr
11.09Tr
25.68Tr
Transformation Agenda –Sectoral Allocation
Sector
Real
Sector
Physical
Infra’ture
Regional
Devt
Human
Capital
Total
New
Project
199
On-going Total
Project
Projects
811
1,010
Amount
(Nm)
1,747,242
69
382
451
6,770,431
35
67
102
4,529,758
113
213
326
3,485,198
416
1,473
1,889
16,532,629
Sources of Funding for Infrastructure
On-Budget
Off-Budget
Private Sector
Regular Budgetary Special
Allocation
Intervention
Fund
Enhanced
FGN Bonds
Statutory
Allocation
Pension Fund
Viability Gap
Funding
Low Interest
Loans
Credit
Enhancements
Long Term Bonds
Grants
Oil for Infrastructure
Scheme
Sure-P
Private Equity
PPP
Export Credit
Finance
Summary of Potential Infrastructure
Financing Options for 2011-15
Financing Options
Financing Available
Consideration/Remark
Budgetary Provision
N5,760b ($36b)
This depends on oil
revenues, which are
volatile
Public Debt
N4,640b ($29b)
Challenging and requires
regular debt servicing
External Borrowing
Medium Term (2012-2014) Though low interest rate,
Borrowing Plan: N1,488b constitute burden if
($9.3b)
projects are poorly
implemented
Sovereign Wealth Fund
N1,280b ($8b) from the
SWF
May be insignificant
amount
Pension Fund
Potential N800b ($5b)
from Pension Fund
Potentially risky and
controversial
PPPs
Potential N1,600 –N3,200
b($10-20b) from PPP
High cost to end users
CHALLENGES
 The challenges of Infrastructure financing are:
Blocking Revenue Leakages
Need to reduce FG recurrent expenditure.
Need to reduce FG cost of borrowing.
Need to revise Pension Investment Guideline.
Need to refocus and retool ICRC.
How do you get Nigerians to believe and invest
in Nigeria
vii. How do you get Nigerian Media to sell Nigeria to
the outside world.
i.
ii.
iii.
iv.
v.
vi.
FINANCING INFRASTRUCTURE FOR ECONOMIC
TRASFORMATION
Thank you

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