Nigeria’s Infrastructure Deficit Projected to Reach $878 Billion by 2050, Report Warns
A new report by Agusto & Co. has projected that Nigeria’s infrastructure deficit could skyrocket to an alarming $878 billion by 2050, underscoring the urgent need for transformative action in the sector.
The 2024 Infrastructure Industry Report highlights the immense challenges posed by Nigeria’s rapidly urbanizing population, with the country’s infrastructure stock currently representing just 30% of Gross Domestic Product (GDP)—far below the World Bank’s recommended 70%.
Falling Behind on Development
Nigeria ranks behind 23 other nations on the African Development Bank’s Africa Infrastructure Development Index (AIDI). This shortfall, the report warns, continues to hinder economic growth, sustainable development, and efforts to reduce poverty.
Despite initiatives like the National Integrated Infrastructure Master Plan and the Highway Development Management Initiative, progress remains sluggish. Only 30% of the country’s estimated 200,000 kilometers of roads are paved, leaving much of the population dependent on poor and often unsafe road networks.
Railways, a cost-effective transport option, also face severe challenges. Vandalism and funding shortages have left rail transport contributing less than 1% to the transportation sector’s GDP in 2023, further increasing pressure on the overburdened road system.
Insufficient Funding and Low Private Sector Participation
The Federal Government’s N1.32 trillion allocation for infrastructure in the 2024 budget—just 5% of the total budget—falls drastically short of the $100 billion annual funding target outlined in the National Master Plan.
Private sector investment, vital to bridging the gap, has been dismally low. Between 2013 and 2023, Nigeria attracted just $8.4 billion in private infrastructure investment, compared to South Africa’s $17.2 billion over the same period.
Key barriers to private investment include limited long-term financing, poor maintenance culture, corruption, weak contract enforcement, and inadequate project preparation, the report notes.
A Call for Collaboration
The report advocates for a collaborative approach between the public and private sectors to tackle the growing deficit. It recommends the creation of a dedicated fund for bankable projects, enforcement of contract integrity, enhanced public sector expertise, and reforms to reduce corruption and attract investment.
“Ultimately, concerted efforts and collaboration between the public and private sectors will be essential in transforming Nigeria’s infrastructure landscape and driving long-term economic growth,” the report states.
In addition to highlighting the challenges, the report provides data-driven insights, forecasts, and funding models to inform future infrastructure development strategies, emphasizing that increased private-sector participation will be critical to addressing the deficit effectively.
With time running out, the need for bold and innovative solutions to Nigeria’s infrastructure crisis has never been more urgent.
