Bankers’ Committee Pledges to Prioritise Infrastructure Financing in 2022

•To engage government agencies on export promotion

Nume Ekeghe

The Governor of the Central Bank of Nigeria (CBN) and Chairman of the Bankers Committee, Mr. Godwin Emefiele, has disclosed the committee’s resolve to support the federal government to reduce the country’s huge infrastructure deficit by committing more funds to the sector in 2022.

The CBN Governor, Mr. Godwin Emefiele disclosed this yesterday at the closing ceremony the 12th Annual Bankers’ Committee retreat.

He also added that the CBN and Bankers Committee through Infrastructure Company Limited (InfraCo) would facilitate an initial funding of N170 billion for the Lagos- Ibadan expressway, Abuja-Kano Road and the second Niger bridge which would be tolled.

He also added that as part of measures to increase foreign exchange through non-oil exports, the CBN would engage government agencies and parastatals in the sector so as to enhance export proceeds.

He said: “In 2022, the Bankers Committee will be focusing on supporting the CBN and the federal government in developing the infrastructure of the country, reducing the level of infrastructure deficit of the country; realising that there is increasing limited fiscal space to fund capital projects.

“The president had given approval for the establishment of the Infraco earlier in the year. As we speak, Infraco is already working on three major infrastructure projects in the country – the Abuja -Kano road; Second Niger Bridge and the Lagos-Ibadan expressway.”

Speaking further, he said: “What Infraco has done was when the federal government approached us to provide some kind of bridge funding. The bridge funding is N170 billion provided so that those projects can move on. The entire scope of those three projects I’m told is slightly above N1 trillion but the numbers are being worked on.

“And I believe by the time the asset managers effectively come on board, the details of those projects and the remaining aspects of those funding would be coming in through debt and that is where the asset managers would come in with entire scope and then we would know the detailed cost of those three projects.”

Furthermore, he said the roads when completed would be tolled to recoup the money spent as well as for maintenance.

He added: “All of the roads will be tolled. And we know that many other countries in the world, roads are tolled because those projects are commercially viable, they can be refunded with tolls so that maintenance can be done on a regular basis and people will pay for it and enjoy good roads and enjoy good facilities because that’s the only way we can fund the infrastructure of this country, which is the large amount of money needed.”

On funding of Infraco and how it would be recouped, he added: “We have already said that N1 trillion out of the 15 is equity, being contributed by the CBN, African Finance Corporation, Nigerian Sovereign investment authority (NSIA) also very visible authority. The remaining N14 trillion would be accessed from debt market. And I must say that we are happy here that these are substantially going to be naira funding.

“The banks have large pool of funds; the pension administrators have large pool of funds and we are reasonably optimistic that more than 50 per cent or two third of this money is going to be raised locally.

“Before we begin to think about accessing international finance, we would try as much as possible to limit debt for foreign currencies particularly knowing that some of these projects and revenues are going to be generated with local currency. Where foreign currencies are needed, we will also take those and then be able to use them.

“What is important is that we are saying that within the Nigerian financial system, there is a lot of idle capital or idle forms that can be channeled if packaged the way Infraco has set up to give comfort to investors especially our local investors to really put their funds in these projects. This is a brilliant alternative financing methodology that has been brought up and we seek to really look into this. It intends to help government and private sector to raise finance, without necessarily encumbering the balance sheet of the federal government of Nigeria.”