Nigeria’s infrastructure deficit to hit $878b by 2040, says SEC DG

Mounting concerns over Nigeria’s infrastructure deficit re-echoed over the weekend as Mary Uduak, acting director general of the securities and Exchange Commission (SEC), disclosed that the country’s infrastructure deficit would hit hit $878 billion by 2040.

And the future holds opportunities for renewable energy, energy efficiency, infrastructure, food, agriculture and the task ahead is to ensure funds are channeled to green projects with multiple socio-merits. The Commission will continue to promote an active enabling and regulative environment for the issuance of this instrument”, Agama said.

Financial market experts in Nigeria are calling for more domestic participation in green bonds investment to curb infrastructural deficit in the continent as well as eliminate environmental degradation.

Addressing capital market correspondents at their annual workshop in Lagos, Uduak said the deficit could be reduced through the several ethods, including the issuance of green bonds to fund infrastructure.

According to her, the first N10 billion tranche of the green bond issued by the country received an excellent A+ rating from Moody, adding that SEC’s drive to the green bond program was unprecedented.

Uduk who was represented by Emomotimi Agama, head, registration and market infrastructure department, SEC, said that it was necessary Nigeria stands at the fore-front of innovations and initiatives, adding that the second tranche of green bonds which has been issued, presents an opportunity for the country to solve its infrastructural deficit.

“Infrastructural deficit is expected to hit $878 billion by 2040 and the future holds opportunities for renewable energy, energy efficiency, infrastructure, food, agriculture and the task ahead is to ensure funds are channeled to green projects with multiple socio-merits. The Commission will continue to promote an active enabling and regulative environment for the issuance of this instrument”, Uduak said.

Also speaking, Bola Onadele, chief executive officer, FMDQ OTC Securities Exchange, who was represented by Emmanuel Etaderhi, the senior vice president, economic development division at the Exchange, disclosed that $155 billion has been recieved as proceeds of green bonds issuance.

Onadele noted that the country’s resourceswere not growing in tandem with the rising population while adding that the reason for Nigeria’s woeful performance in the power and energy sector was its inability to tap into energy utilization from the sun as done in some European countries.

According to him, the challenges affecting green bonds include low level of local participation in green bond verifiers, lack of investible projects, cost of verification and lack of understanding on the part of key investors.

“Green bond investors enjoy waivers relating to tax and in the next 15 years, we will require $7 trillion in investments connecting sustainable finance to capital markets.”, he said.

He revealed that the FMDQ has set a sustainable finance committee to engage private and public and will engage in training with partnership with FSD Africa and Climate Bond Initiative (CBI).

Commenting further, Jubril Adeojo, director, climate finance advisor, CBI, noted that green bonds is made for Africa and with the deficits seen in major sectors of the economy, there is opportunity to focus more on renewable energy, hybrids to reduce the consumption of fossil fuels.

Adeojo said, “there is so much money to be made from green bonds and there is a way by eliminating exposure to foreign exchange which is sticking to local currency debt instruments. Once the real sector moves, things will change drastically and I believe that more people have to be encouraged to invest in the bonds”