Rand Merchant Bank Nigeria has called on government to take conscious steps in transforming the state of infrastructure in the country, as no meaningful development would take place in its current poor state.
The Managing Director of the bank, Michael Larbie, who gave the charge, however admitted that infrastructure financing plays critical role in promoting economic growth, improving standard of living, poverty reduction, enhancing productivity and in improving competitiveness.
Noting that it also contributes to environmental sustainability, the banker pointed out that Nigeria is currently faced with a sizeable infrastructural gap that has hindered its desire to exploit its rich natural and human resources to stimulate its development.
Indeed, despite the country’s huge oil and gas, sunlight and hydro resources, the country is yet to generate enough electricity to drive its development and support real sector activities, as well as negatively impacted cost of doing business, investment, and capital inflow.
But Larbie, while speaking at the 2017 yearly conference of the Finance Correspondents Association of Nigeria (FICAN) in Lagos, recently, alongside the acting Director-General, Infrastructure Concession Regulatory Commission (ICRC), noted that Nigeria’s economy is too big to be ignored in spite of the challenges.
The RMBN CEO pointed out that Nigeria’s economy is too big to be ignored in spite of the recent recession, adding that economic growth in the country is propelled by the non-oil sector mainly wholesale and retail trade, agriculture, services, telecommunication, and building & construction.
He noted that deepening diversification of the Nigerian economy from oil, and development of higher value-added businesses, large consumer market and growing middle-income families, are some of the opportunities in the Nigerian market.
According to him, in terms of electricity, Nigeria presently has a cost unreflective tariff in place; insufficient gas supply to the power thermal plants; non-bankable gas supply agreements; bureaucracy of government agencies; lack of affordable long-term financing for sponsors; as well as low appetite by lenders.
Also, in ICT, there is a digital divide with lack of access to Information Communications Technology across parts of the country; lack of policy continuity which has constrained the creation of ICT parks/hubs; and weak legal framework; among some of the challenges in the sector.
Again, in the transport sector, he pointed out that there is sub-optimal funding arrangement for highways and trunk roads; lack of an integrated inter-modal transport system across the country- factors that have continued to affect the provision of efficient transport infrastructure.