Compact infrastructure is imperative for sustainable development. As the Brookings Institution has noted, “Infrastructure enables trade, powers businesses, connects workers to their jobs, creates opportunities for struggling communities, and protects the nation from an increasingly unpredictable natural environment.”

It facilitates economic growth by providing jobs and supporting workers, maintaining supply chains, and even reducing inequality. It can also have a multiplier effect, meaning there is a “measurable economic impact for each dollar of government spending,” according to the World Bank.

Nigeria’s infrastructure spending is currently low relative to the country’s needs. The country needs infrastructural development as the current deficit requires up to $6 trillion annually over the next three decades to bridge this gap. Putting this into perspective, the federal government would need to spend the entire annual budget of trillions of naira over the next century on capital expenditure to meet the target.

In the past, the Nigerian government has deployed different models to resuscitate nonperforming and underperforming assets, either through outright sales to private investors or some form of public-private partnerships (PPPs). While some projects have been successful, others have not.

Infrastructure spending in Nigeria is typically 10 – 15% of the annual budget. Nigeria must invest an estimated $2.3 trillion in infrastructure between 2020 and 2043 to meet international standards. The country’s infrastructure stock is only 30% of its GDP, well below the international benchmark of 70%.

The Nigeria Infrastructure Fund (NIF) aims to invest in domestic infrastructure projects that meet targeted financial returns and contribute to developing essential infrastructure to stimulate the growth and diversification of the Nigerian economy, attract foreign investment, and create jobs for Nigerians.

Potential areas for investments include health care, transportation, energy and power, water resources, and agriculture, amongst others. The government may invest up to 10% of the funds in NIF in social infrastructure projects, which promote economic development in underserved sectors or regions in the country.

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