AFC chief: Nigeria ready to meet $510bn challenge

The oil-rich country of 150 million people also provides infrastructure investors ‘a market of people who can pay for the services that you can provide’, says African Finance Corporation CEO Solomon Asamoah.

Nigeria has the political will and the money and resources to provide lucrative opportunities to private investment firms to help fund the country’s huge infrastructure needs, which could total $510 billion in the next decade.

Solomon Asamoah, chief executive of the African Finance Corporation, told II that Nigeria is uniquely situated among African countries for infrastructure investment because of its “massive internal market” of 150 million people and its cash-rich oil and gas sector. 

Nigeria: infrastructure
investment hotspot

“If you put those two things together . . . it’s a great market for developing infrastructure because you have a market of people who can pay for the services that you can provide,” Asamoah said.

Asamoah believes the energy market in Nigeria would be at the top of the government’s list of priorities because the country is currently experiencing rolling blackouts.

“Power’s always been a problem in Nigeria, but . . . a lot of the bad effects of power shortage are masked because everybody has a generator. So what happens is that the lights don’t tend to go off, or they go off for a second, but then the generator kicks in,” Asamoah said.

You have a market of people who can pay for the services that you can provide

Solomon Asamoah

People with diesel-powered electricity generators are no longer able to cope with such shortages because the price of diesel has risen dramatically in the last three months, forcing cutbacks on diesel consumption.

Asamoah said that there is “a great deal of political momentum”, stronger than ever before, to solve the country’s infrastructure spending needs.

Asamoah said he is “absolutely convinced” that the country will soon develop comprehensive public private partnership laws to govern the engagement of the private sector in public infrastructure projects.

The Nigerian government published a consultation draft of a national policy on PPPs in July, but no comprehensive legal framework has been adopted by the government.

In that draft, the government named over $100 billion of needed investment through 2020 in power generation ($18 billion to $20 billion), railroads ($10 billion), roads ($14 billion) and oil and gas ($60 billion) sectors to meet the country’s growth targets.

Remi Babalola, Nigeria’s finance minister, said at a gathering with financial journalists last week that the total spending required would be $510 billion in the next ten years.

Babalola also said that the government would intensify its efforts to attract and partner with the private sector through PPPs, according to local media reports.

More important than PPP legislation itself, though, Asamoah believes that “the political will to implement and enforce and allow it to happen” is finally present in Nigeria.

He said there will be significant investment opportunities down the road, which African Finance, a hybrid, private-sector led investment bank and development finance institution, hopes to bring to the attention of international investors interested in African infrastructure finance.