THE Central Bank of Nigeria (CBN) is planning to establish $39 billion (N15 trillion) InfraCo fund, an independently managed fund, expected to be rolled out within the next one year to boost infrastructure development.
CBN Governor, Godwin Emefiele who made this known, said the world-class infrastructure development vehicle, focused on Nigeria, will be managed by an independent infrastructure fund manager.
This fund will be utilised to support the Federal Government in building the transport infrastructure required to move agriculture products to processors, raw materials to factories, and finished goods to markets, as envisaged at the CBN Going for Growth Roundtable in March 2020.
Nigeria requires investment of $33 billion to $35 billion yearly over the next five years to close its infrastructure gap, estimated at about 45 per cent of economic output, according to the country’s Infrastructure agency, Bloomberg report said.
The initiative is part of a series of new measures announced by Emefiele to “drive a self-sufficient Nigerian economy.”
Others plans include: prioritising foreign exchange for the importation of machinery and critical raw materials with a focus on “light manufacturing, affordable housing, renewable energy and cutting-edge research.”
The CBN will also consider setting aside N500 billion in funding for manufacturers within the next three years to “procure state-of-the-art machinery and equipment” and another fund for housing development.
On the medium-term policy priorities of zero three years, the CBN boss said once the world returns to some new normal having tamed COVID-19 by a combination of vaccines and social distancing, and the economy reopens for business, the CBN will act quickly to enable faster recovery of the economy by targeted measures towards particular sectors that are able to support mass employment and wealth creation in the country.
“We will do so by focusing on four main areas, namely, light manufacturing, affordable housing, renewable energy, and cutting-edge research,” he said.
Emefiele said to pursue a substantial economic renewal, including replacement of at least 25 percent of the machinery and equipment for enhanced local production, there is an estimate of at least N662 billion worth of investments to acquire hi-tech machinery and equipment.
He said the identification framework in the banking sector using the bank verification number (BVN) will be used to verify the information provided by the off-takers before the developer can access the funds.
“We will also be considering ways to assist the Mortgage Finance Sub-sector as well as build capacity at the State levels for their land administration agencies to process and issue land titles promptly, implement investment friendly foreclosure laws and reduce the cost of land documentation, as this has remained a major inhibiting factor in the provision of affordable housing in the country,” he said.