The Nigerian government has approved the creation of a company to fast-track development of critical infrastructure, with $2.6 billion in initial financing.
In 2020, Africa’s most-populous country slipped into recession in its third quarter for the second time in four years, hit by the COVID-19 pandemic and a fall in oil prices. It faces a huge infrastructure deficit.
The company, Infra-Co, will be one of the top infrastructure finance entities in Africa and will be wholly dedicated to Nigeria’s infrastructure development, officials said.
“It is envisaged that, over time, the entity will grow to naira 15 trillion ($39.3 billion) in assets and capital,” a spokesperson for Vice President Yemi Osinbajo said in a statement.
Infra-Co will operate as a public-private partnership and will be initially funded by the Central Bank of Nigeria, the Nigerian Sovereign Investment Authority and the Africa Finance Corp.
It will focus on reconstruction and developing public assets, new roads, rail, power and other key infrastructure projects.
Financial experts expect Nigeria’s economy to contract by at least 3% in 2021, a situation many fear will further deepen the country’s infrastructure crisis and worsen an economy already struggling with the pandemic.
Nigeria’s senate in 2020 approved nearly $23 billion in foreign loan requests by Nigerian President Muhammadu Buhari to support a series of large-scale projects, which the government hopes will revamp the country’s infrastructure.
The country also has launched a $1.96 billion rail project linking it to neighboring Niger as the country looks to boost trade.