Archive How the private sector can help improve infrastructure

How the private sector can help improve infrastructure


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By Jude Chukwuemeka

Is there a need for power shift, something like putting more power in people’s hands? It is not about the masses taking over the power belonging to government in Nigeria, but rather, the power for the masses to see the need and have the capacity to satisfy that need. In this case, the masses will not always call on the government to do everything for them.

Take for example, how nice it would be if in schools, parents are getting more control than ever before over their children’s education. This could be achieved through decentralisation or a case of enabling local communities to take over the running of local services and decide their neighbourhood plans.

Of course the most immediate example of our long-term thinking is our commitment to deal with the disastrous legacy of debt and deficit and the latest emergence of challenges in the oil and gas sub-sector.

The tough and responsible decisions Nigeria is taking or has taken on tax and spending is the essential starting point for long-term economic success. For Nigeria, these are the starting point, not the end point. And talking about long-term economic success, the present civilization must make sure that it leaves assets to sustain future prosperity because good government is about building for tomorrow.

Infrastructure matters so much, yet the way it is being provided it in Nigeria is wrong. That’s why Nigeria is falling behind when it comes to building of infrastructure.

There is now an urgent need to repair the decades-long degradation of the country’s national infrastructure and to build for the future with as much confidence and ambition as government can.

Infrastructure matters because it is the magic ingredient in so much of modern life. It is not secondary to other, more high profile elements of economic strategy. It affects the competitiveness of every business in the country; it is the invisible thread that ties a country’s prosperity together.

Infrastructure gets power to our lights, water to our taps, workers to their jobs, and food to our shops. It enables factories, offices, warehouses, workshops to function, to trade, to grow.

It’s the network that powers smart phones, allows us to log on to the internet, to travel, to live the lives we choose. It is the platform for active citizenship. And its value lies in its ability to make things possible tomorrow that we cannot even begin to imagine today.

If our infrastructure is second-rate or third rate, then our country will be too.

In Nigeria, we can boast of bridges and soaring stations – structures built with long-term endurance in view.

Our national legacy to the world can be seen not just in language and culture, but through the skyscrapers, the beautiful edifices, and other magnificent infrastructure, designs brought from abroad.

So let’s not accept the idea that our glories can’t deliver greater infrastructure; that it’s not even worth starting because projects always run late or over budget.

It is much better for us to hope to overcome our challenges. You only have to travel abroad, and compare it to the experience at home to see that we are seriously exposed as technologies change, demand grows, and our competitors outpace us.

But the truth is, no government in living memory has set out a sufficiently comprehensive and ambitious vision of Nigeria’s infrastructure needs; the overall system – an integrated set of networks that collectively deliver the economic and social goods.

But we can’t hide from the fact that new infrastructure is being paid for either by those who use it, or by government, or a combination of the two.

But compared to some other aspects of government activity, the up-front investment in infrastructure should be ripe for a non-governmental approach. Investment in infrastructure produces real, tangible assets that can earn a return. And yet no government has really solved the problem of how to finance infrastructure within the public spending constraints that all countries have. On top of the failures of vision and of financing, there’s been a simple failure of nerve. No government has acted with the necessary determination to blast through the vested interests and bureaucratic hurdles in order to provide what the long-term national interest demands.

It’s not enough just to keep the existing infrastructure going. We need to build it as other countries are building the completely new infrastructure needed for the future.

Nigeria loses billions of naira a year because of congestion on our roads. Our railways are crowded and expensive – compared to advanced countries.

The real innovation however, is in the new framework that must be created – tackling the three failures that have held back the development of our infrastructure: failure of vision; failure of financing, and failure of effort.

In transport – better trains and roads.

In energy – cleaner, dependable electricity supplies.

In telecoms – faster broadband and new mobile technologies.

And in construction – a planning system that unlocks sustainable growth, rather than holds it back.

It is of course the responsibility of government to set out an assessment of future infrastructure needs. But things may not go that smoothly if we expect government to make all the plans and pay all the bills. At least, the time that has passed by shows that if we wait for government to fund the infrastructure challenge, we’ll be waiting forever.

But equally, it’s wrong to think that this job should fall entirely on the shoulders of the private sector. Getting infrastructure right is a challenge over many decades. It requires private money, but it also requires political support and stability – for the creation of what Adam Smith taught us to see as public goods.

So when it comes to the question of financing, the federal government needs to use the power of the masses to unlock the dynamism of the market. Government has a duty to provide a framework in which demand can be met and which attracts investors – pensions funds and sovereign wealth funds – because they can rely upon fair returns.

That in turn means getting regulation right, so that consumers and the taxpayer don’t end up with high bills and too much of the risk. So there is a need to encourage the appetite of investors – both at home and also abroad – for investment in Nigeria infrastructure, taking advantage of national stability and open markets. In a world which too much investment has been high-risk and short-term, there is huge potential for a different approach.


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