By Brangyet Kabien
As Nigeria is still grappling with another round of recession, Moody’s Investors Service, a global credit rating agency, has rated the country low in terms of infrastructure development stating that the infrastructure in Africa’s biggest economy is behind other emerging market peers, with about $3 trillion needed over 30 years to close the gap.
The agency disclosed this in its first report on the Nigerian infrastructure market on Sunday.
The reported noted that weak institutions and governance frameworks along with a low tax base are hindering infrastructure investment, while financially strained utilities are unable to invest in improvements.
Expatiating, the Vice President, Senior Analyst at Moody’s Investors Service, Kunal Govindia, said that Nigeria had an infrastructure deficit, facing additional pressures from a rapidly growing population.
Govindia said, ”Its low government funding capacity and customer affordability has been weakened further by the COVID-19 pandemic and low oil prices.”
According to the report, the focus of infrastructure development had been within power, railways, roads, ports, and pipelines, adding that the trend was expected to continue with the particular investment needed to address Nigeria’s electricity shortages.
“To this effect, Nigeria’s power sector could benefit from renewable energy like solar and wind, with financing also possible from green bonds,” it said.
Also highlighting the budget constraints facing the country, the rating agency noted that addressing this shortfall would require financing from the private sector, multilateral development institutions and other non-state investors.
“Financial guarantors, multilateral development banks and local institutional investors will be important in helping finance infrastructure development,” it said.
The Federal Government had presented N13.08 trillion budget for the 2021 fiscal year, of which debt services will gulp N3.12 trillion with a deficit of N4.48 trillion.
The Federal Ministry of Works and Housing which handles infrastructure development has a paltry N404 billion – an equivalent of $1 billion.