Minister of Works, Babatunde Fashola has counselled the country to look at the possibility of floating N10trillion National Infrastructure Bond as a way to create and maintain a mass pool of funds to meet the funding gap and challenges associated with timely construction and completion of road infrastructure in Nigeria.
Fashola counsel was taken as a viable option by the Chairman national assembly joint committee on works, Adamu Aliero who said the federal government should adopt viable alternative funding option for the completion of ongoing road infrastructure by private funds to be regained from tolling.
There are 540 road projects across the country being constructed by the ministry of works, the minister stated.
Fashola said such bond should be secured by the federal government to attract the pension fund managers to invest in the bond as they do with treasury bills as well as activate more investment participation by members of the public who have money as small as N50,000 and N10,000 to invest in such bond.
The Minister said this while appearing before the national assembly joint committee of works to defend the 2020 budget and account for the expenditure of the 2019 releases to the ministry.
He pointed out that such money instrument that would be adopted should be designed to accommodate the religious sentiments of some Nigerians, so as not to exclude any group of persons from investing and denying the nation of the money that can be raised.
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“Like I said during my confirmation hearing, that we should do something like launch the national infrastructure bond and this will be the responsibility of the ministry of finance and debt management office.
“I had done an envelope size of N10 trillion that does not mean we want to raise that money this year, but if we launch such a competitive coupon rate backed by law as a secured instrument, that people can put their money into.
“I think that is one way to inspire pension bond to invest money in a secured government bank instrument. They are investing in treasury bills because it is government-backed instrument. It is secure because the money must not be lost. that is the whole idea.
“They are a little concern about infrastructure, because of some of these challenges, so if government backs it anytime we want to raise money, we have a N10trn fund over four years or five years, every year or period we need to fund project, we issue a demand for subscription and raise two trillion,” Fashola stated.
The minister said that he was confident that the money can be raised because his experience with the Sukuk fund showed that on both occasions the issuance was over-subscribed indicating that there is a wide appetite among Nigerian investors to invest in secured funds.
Fashola dismissed insinuations by some lawmakers, that it was part of his ministerial function to physically inspect project sites across the country, insisting that it was passion for the job that motivates such action by Ministers.
“I must say that ministers from other countries do not visit project site as we do here, there are officers in charge of these line of work, he stated.
There are 504 road projects across the country and it is not possible for me and the minister of state to visit all of them, when were three we shared ourselves to visit two geopolitical zones each.
He further dismissed the statement by the committee chairman that the Infrastructure Concession and Regulatory Commission (ICRC), blamed the low public-private partnership (PPP) funding of roads to poor proposals which can offer them return on tolling.
The minister also advised Nigerians to moderate their expectation from the tolling of the roads because the recent survey of traffic reveals that the third mainland bridge has the highest record of 157,000 vehicular movements per day followed by the southwest route which recorded 19,000 vehicular movements.
He lamented that some communities were in the habit of demanding compensation for lands on which roads are to be built.
Chairman of the joint committee on Works, Senator Adamu Aliero, said the N10trillion funding gap on road construction was above government funding capacity to build roads more so that the national budget of N10trn clearly explains the limitation of the government in this direction of funding.
Aliero said the federal government should leave compensation for communities to states when federal road projects are being constructed.
According to him, if the state government needs the roads to be constructed, they should pay the compensation. “I do not see why federal government should pay for compensation,” Aliero stated.
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