Following the incessant break down of the national grid and consistent fuel disruption across the country, former Vice President and Presidential Candidate of Peoples Democratic Party (PDP) has said that poor ease of doing business in the country accounts for the low private sector participation and investment in the country.
Atiku said Nigeria currently spends less than 1% of its annual GDP on infrastructure as against the required 3%-5% of annual GDP. He said that the shortfall has created a deficit, estimated at USD 3 Trillion over the next 30 years adding that the trend will continue for a very long time unless ease of doing business is improved which will lead to greater private sector investment.A statement signed by
Paul Ibe, Media Adviser to Atiku Abubakar on Tuesday stated that in his campaign manifesto titled “My Covenant With Nigerians”, Atiku said that the public sector does not have the resources or expertise to deliver lamenting that financing of critical infrastructure in the country requirement approximately 100 billion USD per an um while Nigeria’s entire budget is only USD 30 billion.
“It is important to emphasise that actively promoting private sector participation in infrastructure development will be beneficial to the economy. It is also inevitable that we incentivize the private sector to take risk and invest in the economy for the following reasons.
“There is no telling that Nigeria’s huge infrastructure deficit is making businesses uncompetitive and stunting economic growth. The supply of efficient infrastructure, including roads and rail transportation, communication, adequate power etcetera is extremely important for the economy to grow and create much-needed jobs” Atiku said.
The PDP flag bearer said that to rebuild the economy, the country must improve the quality of its infrastructure stressing that inadequate infrastructure has been identified as the most problematic factor for doing business in Nigeria.
He said, “In terms of actual spending, Nigeria currently spends less than 1% of its annual GDP on infrastructure as against the required levels of between 3%-5% of annual GDP. This shortfall has created a deficit, estimated at USD 3 Trillion over the next 30 years. Our overwhelmed public sector does not have the resources or expertise to deliver. While our financing requirement is approximately 100 billion USD per annum, Nigeria’s entire budget is only USD 30 billion. The National Development Plan envisages that 80% of all investments will come from the private sector.
“Regrettably, Nigeria’s core infrastructure sectors are not operating efficiently. Almost all the infrastructure sectors from roads, railways, housing, power, and energy are operating below potential. Over the years, we have observed how these enterprises consume huge public resources while offering poor quality services. Many of these State-owned Enterprises have become a source for political patronage, corruption, and rent seeking to the detriment of Nigeria’s long-term economic growth.
“Nigeria’s refining infrastructure remains poor despite the perennial injection of unending public resources for turnaround maintenance. The country’s refining capacity per capita is 0.002 bpd/capita compared to Libya’s 0.06 bpd/capita and South Africa’s 0.01 bpd/capita. As of today, Nigeria imports over 80% of its refined products to meet its current needs and is said to be the largest importer of PMS in the world, with significant balance of trade implications”.
Atiku pointed out that the fiscal cost of maintaining these State-Owned Enterprises is enormous, and comes with even greater opportunity costs.
“By holding unto these underperforming enterprises, Nigeria is sacrificing investments in critical areas, including education, health, water, sanitation, and rural infrastructure. For example, the first phase in the rehabilitation of Nigeria’s refineries is expected to gulp US$1.55 billion! With its current precarious fiscal position and daunting development challenges, Nigeria cannot afford to forego productivity enhancing investments in human capital development and channel scarce resources to moribund enterprises.
“According to the Bureau of Public Enterprises 67% of the 142 privatized firms are performing. It must be noted that several firms, not just liberalised enterprises, are facing business environment challenges in Nigeria. Many have closed and or been forced to relocate to neighbouring countries because of the poor business environment”.
He said that the economy is in need if reforms but pointed out that every reform measure has the potential to create difficulties especially in the short-term, but with a positive impact on incomes, employment, and poverty, over the medium and long-term.
