How can Nigeria's improve infrastructure spending?

Nigeria's infrastructure sector continues to face significant challenges despite the government's efforts to boost investments in critical areas such as power, works, and housing. In a recent CNBC Africa interview, Nigeria's Minister of Power, Works and Housing, Babatunde Fashola, highlighted that the Federal Government has allocated 15% of its earnings to infrastructure projects. While this allocation is commendable, it falls short of addressing the country's vast infrastructure needs. Anthony Eke, Acting Divisional Head of Infrastructure & Transport at Diamond Bank, joined the discussion to offer insights on the policy reforms and private sector participation necessary to attract more investments into Nigeria's infrastructure sector. Eke emphasized the importance of creating a conducive policy environment that would encourage private investors to engage in infrastructure development projects in the country. He underscored the need for a robust legal framework and financial system that supports long-term investments in infrastructure. Additionally, Eke highlighted the significance of ensuring fair returns on investment for private sector players to foster trust and sustainability in infrastructure projects. The discussion also touched on the potential role of pension funds in financing infrastructure projects and the challenges posed by high local financing costs. Eke stressed the need for policy reforms to enable more greenfield projects and attract greater private sector involvement in infrastructure development. The interview shed light on the critical aspects that require attention to accelerate infrastructure investments in Nigeria. One key theme that emerged from the conversation is the imperative need for comprehensive policy reforms and institutional capacity building to facilitate public-private partnerships (PPP). Eke called for a clear and concise policy framework that guides private investors and streamlines project approval processes. He emphasized the importance of enhancing the legal and regulatory environment to instill confidence in infrastructure investments and mitigate project risks. Furthermore, Eke advocated for the establishment of a dedicated PPP agency to drive infrastructure development initiatives and provide the necessary expertise in project management. The interview underscored the vital role of PPPs in mobilizing resources and expertise for infrastructure projects, given the scale of investment required to address Nigeria's infrastructure deficit. Eke's insights echoed the sentiments shared by industry experts, highlighting the need for collaborative efforts between the government and private sector to boost infrastructure investments and drive sustainable economic growth. As Nigeria continues to prioritize infrastructure development as a key pillar of its economic agenda, implementing strategic policy reforms and enhancing private sector participation will be crucial in unlocking the full potential of the country's infrastructure sector. By fostering a conducive investment climate and strengthening institutional capacity, Nigeria can attract more private investments and accelerate the pace of infrastructure development to meet the growing needs of its population. With a concerted focus on policy innovation and partnership building, Nigeria has the opportunity to transform its infrastructure landscape and drive inclusive growth and development across the country.