The African Development Bank (AfDB) has stated that Nigeria and other African countries critically needed to change the current funding mix and create partnerships to finance infrastructure and other projects.
The pan-African bank advocated a shift from government as the main financier of critical infrastructure, towards smarter partnerships with the private sector and other development partners, including emerging markets as well as private equity capital looking for yields in Africa’s lucrative infrastructure asset class.
The AfDB Country Director in Nigeria, Ebrima Faal, who spoke in Abuja on Tuesday at a roadshow on the forthcoming Africa Investment Forum (AIF) in South Africa, observed that there was no doubt that "we need to leverage strategic alliances and partnerships in order to remove common obstacles to finance, especially those created by the perception that investment in Africa is somehow more risky than comparable investments elsewhere."
According to him, there has never been a better time to invest in Africa’s infrastructure asset class, while ensuring a diverse source of resources, water-tight project preparation and a strong business case, than now.
"The business opportunity in this regard, is further strengthened by the many positive factors which are now converging to mitigate risks and drive high returns on investment and economic prosperity.
"Presently, the Bank and its partners have in place a number of financial and advisory products that help ease up the risk profile of a project and host country.
"Indeed, over the last decade, and despite impressive growth rates in most of the continent, Africa’s infrastructure needs remain formidable with annual financing gap between $130 and $107 billion annually. Nigeria’s infrastructure cumulative financing needs are estimated to reach $3 trillion by 2044 or about $100 billion annually.
"This is all happening at a time when public sector finances are extremely pressured," he said.
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