Infrastructure deficit remains one of Nigeria’s biggest challenges amidst dwindling revenue and a global economic downturn.

Despite funding challenges, Nigeria has continued to demonstrate firm resolve in bridging the vast infrastructure gap by developing innovative funding mechanisms for infrastructural projects. These infrastructural funding initiatives of the Nigerian government create an opportunity for investors. The most recent initiatives are outlined below.

Concession of 12 Federal Highways

The government has declared its intention to concession 12 highways across the country through its Highway Development and Maintenance Initiative. This is intended to enable access to private sector funding for the rehabilitation of these critical interstate roads. The Ministry of Works and Housing has announced its receipt of an Outline Business Case (OBC) certificate from the Infrastructure Concession Regulatory Commission (the federal Public-Private Partnership regulator). To assure investors of the bankability of these projects, the governed has declared that the roads will be tolled. The concession arrangement will be based on a build, operate and maintain the model and will be implemented in two parts: Value Added Concession and  Unbundled Assets Approval.

The 12 highways identified for the concession are:

Benin-Asaba Highway

Abuja – Lokoja Highway

Kano – Katsina Highway

Onitsha – Owerri – Aba Highway

Shagamu – Benin Highway

Abuja – Keffi – Akwanga Highway

Kano – Shuari Highway

Potiskum – Damaturu Highway

Lokoja – Benin Highway

Enugu – Port Harcourt Highway

Ilorin – Jebba Highway

Lagos – Ota – Abeokuta Highway

Lagos – Badagry – Seme Highway

Creation of Infrastructure Company

The federal government has also announced the establishment of an infrastructure company (Infraco) jointly being set up by the government and the private sector. The company is billed to start with an initial equity capital of N1 trillion (circa US$2.5 billion). The Central Bank of Nigeria, African Finance Corporation, and the Nigerian Sovereign Investment Authority are the founding equity holders of Infraco. This initiative is expected to unlock private sector capital for the development of critical infrastructural projects.