The Managing Director, Infrastructure Bank Plc., Mr Abdulrasak Oyinloye, has urged the Federal Government to invest the pension fund into financing sustainable infrastructure in the country. Oyinloye made the call in a presentation at the World Engineering Conference on Sustainable Infrastructure in Abuja on Tuesday.
He said that the government should encourage private capital investors to fill the funding gap created by the inadequacy of existing public fund available for development of infrastructure in Nigeria. He noted that economic growth of most of the emerging economic nations such as China and India were built on the deployment of private capital for the development of their infrastructure base.
“Private capital financing of infrastructure management contracts is the major source of infrastructural financing everywhere in the world.
“The phenomenal growth of China and India in the last 15 years is a testimony to a true, tested infrastructure financing capability of private capital. In Nigeria, we do have long-term capital for development of infrastructure. Today, we sit on a pension fund that is about N4.5 trillion. A number of Nigerian insurance funds are not used for infrastructure at all. The Nigerian Deposit Insurance Corporation has a huge fund that is currently lying in the CBN that is not touching infrastructure.”
Oyinloye identified international finance institutions, development finance institutions and export credit agencies as catalysts for attracting direct foreign investments into the development of sustainable infrastructure. He, however, noted that national infrastructure must be developed to the level where it starts to generate revenue, otherwise it would be difficult to access the long-term capital deposited in the Central Bank of Nigeria.
“I can tell you that none of them will ever touch infrastructure until we are able to build infrastructure to the level when it begins to generate revenue. If it does not generate revenue, there is no assurance of a repayment. And until when that is done, that is when those huge capital will get to infrastructure financing. He urged the Ministry of Trade and Investment and the Nigerian Investment Promotion Commission to provide incentives to entrepreneurs who are keen on investing in building infrastructure in the country.
