Investment experts on Wednesday stressed the need for creation of bankable transactions and public private partnership, for infrastructure development.
They made the call at the virtual Financial System Strategy (FSS) 2020 Pension Sector Second Quarter Forum.
The experts said there was the need for creation of bankable transactions with the government to tackle the country’s infrastructure deficit.
Mr Bolaji Balogun, Chief Executive Officer, Chapel Hill Denham, said infrastructure should be structured through the loan and debt capital markets for the transaction to be bankable.
“Even in countries with significant wealth, infrastructure is structured through the loan and debt capital markets to ensure the transaction is bankable and that the costs reflect reality,” Balogun stated.
Speaking on the theme: “Financing Infrastructure Development in Nigeria — Challenges, Opportunities and the Way Forward,” he called for creation of bonds in infrastructural financing rather than loans.
Balogun said that stakeholders must work together for the country to achieve the desired growth in infrastructure development.
“Only if investment in infrastructure grows by 15 per cent to 18 per cent a year, we can reach eight per cent economic growth,” he said.
He also stressed the need for provision of an enabling environment that would drive infrastructure development.
Balogun urged government to embrace private capital in a very significant way in infrastructure development.
According to him, transactions should be structured in local currency and not dollar.
Balogun noted that the country would experience a boost in financial inclusion, improvement in balance of trade, long-term macro and price stability with a well-developed infrastructure.
Other gains of well-developed infrastructure, according to him, are greater production competitiveness, enhanced housing, significant import substitution and robust pensions.
Mr Effiok Ekpenyong, Head, Investment Management Department, Securities and Exchange Commission (SEC), called for collaboration of agencies to remove regulatory bottlenecks affecting infrastructure development.
Ekpenyong also called for partnership with international advisors in building and development of infrastructure financing.
He explained that SEC had already existing regulations and guidelines that would help participants in infrastructure development.
According to him, capacity training is very crucial for participants in infrastructure financing for the country to achieve expected growth and development.
Mr Chidi Izuwah, Director-General, Infrastructure Concession Regulatory Commission (ICRC), said government would work with the private sector to develop bankable transactions.
Izuwah noted that government alone cannot provide the needed infrastructure for economic growth and development.
He said that the country needed a long-term strategy and integrated master plan on infrastructure development.
Izuwah said political will was extremely important in infrastructure development.
Also, Mr Farouk Aminu, Head, Investment Services Department, National Pension Commission, said the commission introduced multi–funds structure to meet some of its FSS 2020 obligations.
Aminu called for creation of more infrastructure instruments that would attract Pension Fund Administrators (PFAs) to the market.
He explained that diversification of investment products would boost PFAs participation in infrastructure development.
Mr Chinua Azubuike, Chief Executive Officer, InfraCredit, called for creation of an enabling environment to crowd in capital.
Azubuike said the country should crowd in domestic credit from domestic funds with public private partnership in infrastructure development.
