1. FINANCING INFRASTRUCTURE FOR ECONOMIC TRANSFORMATION BY DR. YERIMA LAWAN NGAMA HON. MINISTER OF STATE FOR FINANCE AUGUST 5, 2013

2. Theme and Topic The Theme ‘Financing Infrastructure through the Capital market’ is apt as it directly touches on one of the key sources of financing infrastructure to actualize the Transformation Agenda. The Topic ‘Financing Infrastructure for Economic Transformation’ also considers other various sources of funding infrastructure to realize the Transformation Agenda. Hence this presentation will provide a general background to today’s discourse.

3. T/AGENDA, V20: 2020 & NIIMP NIGERIA VISION 20: 2020 FIRST NATIONAL IMPLEMENTATION PLAN 2010 - 2013 SECOND NATIONAL IMPLEMENTATION PLAN 2014 - 2017 THIRD NATIONAL IMPLEMENTATION PLAN 2018 - 2020 FG TRANSFORMATION AGENDA 2011 - 2015 NIIMP 2014 - 2043

4. VISION 20: 2020 A long term plan for stimulating Nigeria’s economic growth and launching the country onto a path of sustained and rapid socio- economic development. Nigeria is expected to be among the top 20 economies in the world with a minimum GDP of N144 billion ($900b) and a GDP per capita income of no less than N640,000 ($4,000) per annum by 2020.

5. TRANSFORMATION AGENDA It is a medium term economic transformation agenda for realizing the Federal Government’s economic growth agenda for 2011 -2015

6. TRANSFORMATION AGENDA The Priority Areas of the T/A are: i. Physical Infrastructure ii. Human Capital Development iii. Governance iv. Real Sector Development The Objectives of the Agenda are: i. Job Creation ii. Strong and Inclusive Growth iii. Well-being of Nigerians

7. TRANSFORMATION AGENDA Key Outcomes of the Transformation Agenda: i. Jobs ii. Poverty Alleviation iii. Better Resource Management iv. Developing Institutions v. Sustained Economic Development

8. National Integrated Infrastructure Master Plan (NIIMP) It is the capital allocation framework, which identifies the required investments to bring infrastructure in Nigeria in line with the country’s long term growth aspirations.

9. Financing Infrastructure Transformation Agenda will require N25.7 Trillion. Phase One of the Master Plan (2014 to 2018) will require N20.32 Trillion. V2020 will require total investment of N32 Trillion. National Integrated Infrastructure Master Plan will require N464 Trillion The Investment Requirement to achieve the objectives of the various Development Plans are as follows: Hence some kind of acceleration of investment is envisaged after 2020. Obviously this is hinged on a vibrant Private Sector led economy.

10. TRANSFORMATION AGENDA Gross Investment in Infrastructure Gross InvestmentTotal% of Total Public Sector14.59Tr56.82% Private Sector11.09Tr 43.18% Total25.68Tr100%

11. Transformation Agenda –Sectoral Allocation SectorNew Project On-going Project Total Projects Amount (Nm) Real Sector 1998111,0101,747,242 Physical Infra’ture 693824516,770,431 Regional Devt 35671024,529,758 Human Capital 1132133263,485,198 Total4161,4731,88916,532,629

12. Sources of Funding for Infrastructure On-BudgetOff-BudgetPrivate Sector Regular Budgetary Allocation Special Intervention Fund Pension Fund Enhanced Statutory Allocation FGN BondsPPP Viability Gap Funding Low Interest Loans Long Term Bonds Credit Enhancements Export Credit Finance GrantsOil for Infrastructure Scheme Sure-PPrivate Equity Sovereign Wealth Fund Infrastructure Bond

13. Summary of Potential Infrastructure Financing Options for 2011-15 Financing OptionsFinancing AvailableConsideration/Remark Budgetary ProvisionN5,760b ($36b)This depends on oil revenues, which are volatile Public DebtN4,640b ($29b)Challenging and requires regular debt servicing External BorrowingMedium Term (2012-2014) Borrowing Plan: N1,488b ($9.3b) Though low interest rate, constitute burden if projects are poorly implemented Sovereign Wealth FundN1,280b ($8b) from the SWF May be insignificant amount Pension FundPotential N800b ($5b) from Pension Fund Potentially risky and controversial PPPsPotential N1,600 –N3,200 b($10-20b) from PPP High cost to end users Private Sector (FDI & Domestic) N11.09TrSubject to effective investment mobilization

14. CHALLENGES The challenges of Infrastructure financing are: i. Blocking Revenue Leakages ii. Need to reduce FG recurrent expenditure. iii. Need to reduce FG cost of borrowing. iv. Need to revise Pension Investment Guideline. v. Need to refocus and retool ICRC. vi. How do you get Nigerians to believe and invest in Nigeria vii. How do you get Nigerian Media to sell Nigeria to the outside world.

15. FINANCING INFRASTRUCTURE FOR ECONOMIC TRASFORMATION Thank you