The Bank Directors Association of Nigeria has said that financing the country’s infrastructure deficit remains the greatest challenge of all the tiers of government.
The President, BDAN, Mr. Sunny Kuku, said the government’s peculiar funding structure, wherein a greater percentage of the budget was allocated to recurrent expenditure, had led to a huge deficit in the funding of capital projects, especially infrastructure.
Kuku said at a news conference in Lagos that the association’s forthcoming annual stakeholders’ conference, entitled, “Public-Private Partnership Innovation in Public Sector Financing,” was meant to show the way forward for the nation’s huge infrastructure deficit.
He said, “We are now at the crossroads of an exciting journey in our nationhood. We have chosen this theme because funding infrastructure deficit in the Nigerian economy remains the greatest challenge for all tiers of government today.
“The government has to consider other sources of funding for capital projects and social infrastructure. Some state governments have embraced the concept of public-private partnership, either through concession or build, operate, transfer/build, own, operate transfer with mixed results.”
While describing this as a major issue, Kuku said banks had to help the private sector with a workable funding arrangement and also assist to source other types of financial institutions to partake in the funding arrangement.
Although banks are willing to play their expected role to solve the problem, the BDAN leader noted that there were still issues and challenges that had to be resolved.
He said, “The BDAN as a body of key decision makers in the banking industry considers it part of our capacity building role to bring up these issues and challenges for frank discussions among stakeholders, so as to generate a robust discussion on effective PPPs financing.
“And by so doing, BDAN would also be contributing significantly to ongoing efforts to address the infrastructural gap in the country and thus, facilitate economic development in Nigeria.”
Kuku said Governor Babatunde Fashola of Lagos State, who had been selected as the guest speaker at the conference, was expected to share the state’s experience in its PPP approach to infrastructure finance.
The General Secretary, BDAN, Mr. Yemi Idowu, said the forum would identify the challenges of PPP financing in the country, and recommend measures banks, other financial institutions and governments could adopt to overcome them in their quest to fund PPP-sponsored infrastructural projects.
Assessing the implementation of the Central Bank of Nigeria’s cash-less policy so far, Idowu said although the programme had recorded great success, the central bank needed to increase the number of outlets that offer electronic payments.
He said, “As you can see, the CBN at some points had reviewed some aspects of the implementation of the policy – the cash withdrawal limits, charges and rollout to other states. The truth is that the policy has moved us forward in terms of appreciation and adoption of electronic payment channels.
“The records show significant increase in electronic payment, and this would not have happened at this pace if not for the cash-less policy. But we should not rest on our oars.
“Besides extending the scheme to other states, we recommend that the CBN should focus more on increasing the number of business outlets that offer electronic payment channels such as salons, schools, petrol stations and airlines.
“We also observe that the CBN governor has advocated for an improvement in telecommunication services. The Federal Government is also exerting pressures to ensure that they provide all the necessary support for the successful implementation of the policy.”
