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FG urged to explore Capital Market for infrastructure development

By BusinessNews Staff on November 7, 2015

The Managing Director, United Capital Investment Banking, Mr. Wale Shonibare, has urged the federal government to tap into the capital market to raise long term funds for development of infrastructure.
>> He made the call on Thursday at the KPMG/ IPFA West Africa seminar where stakeholders gathered in Lagos to discuss “Unlocking Rapid Development of Transport Infrastructure in Nigeria.”

He said Nigeria’s huge infrastructure deficit could be financed locally through raising capital from the capital market.

Shonibare said: “For large projects in this country, we are still relying too much on foreign currency denominated financing. And that is bad for us because if you borrow in dollars and collecting revenues in naira, when devaluation happens, you would not be able to finance those dollar loans. So we need to develop our local capital market so that we can finance our projects in naira.”

He pointed out that the best way to do such was to mobilise savings in Nigeria, even as he cited an example of what happened with the pension funds.

“There can be other institutions both at the federal level and at the state level to mobilise savings. We should have a national savings policy so that we have long term money available for long term projects,” he added.
Further speaking on how to revamp the transport sector, he said: “We need sponsorship from the highest level the same way we had the presidential taskforce on power, we need something similar to unlock the transportation sector.”

“There are several pieces of legislation that need to be put in place. For instance, today, only the national railway authority is empowered by law to build railway lines in Nigeria. If you want to get private sector involved, you have to get rid of that legislation and allow the private sector to come in. I believe our leaders can do it the same way we have done telecoms reforms and power sector, we can also reform the transport sector.

“The most important thing is uncoordinated thinking. We need to have an integrated transport policy; so that if we are investing in the ports, we have to invest in the roads that come out of these ports and also the railways. We can’t focus all our attention on roads because if we move all our heavy goods by roads, those roads would not last for long. We need to focus on how ports lead to roads, links to rail and how that leads to airports. Everything is integrated and that is how the advance countries deal with this issue of transportation,” he advised.

[ThisDay]

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