Infrastructure deficit in Nigeria valued at trillions of naira places about 15 percent additional burden on the cost of doing business by manufacturing firms and service providers in the country, leading to high cost of products and services, experts have said.
The deficit, according to the experts, is so huge that Nigeria needs to spend about $14.2 billion per year for the next 10 years to be able to bridge the gap.
Stakeholders in the telecoms and housing industries readily explain to whoever cares to listen that infrastructure is reason for the high call tariff in Nigeria, just as it is the obstacle hindering affordable housing delivery the country.
In her keynote address at the just concluded four-day conference organised by the Nigerian Institution of Estate Surveyors and Valuers (NIESV) in Benin City, Oby Ezekwesili, former minister of education and former World Bank vice president for rica, noted that infrastructure deficiency has held down the development of Nigeria’s huge economic potential.
Ezekwesili noted further that in spite of relative macroeconomic stability following the deep fiscal and monetary policy reforms of 2003-2007, Nigeria is still in what she called “oil trap”.
“Oil trap has led to the failure of the country to translate oil revenues to human capital and physical infrastructure; failure to industrialise and to complete the huge remaining agenda for deregulation and liberalisation of sectors to expand sources of growth”, she said.
Continuing, she said, “Those basic physical and organisational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function, including roads, bridges, rails, air transportation, ports, water supply, sewers, electrical grids, telecommunications etc, are lacking”.
Hakeem Oguniran, managing director of UACN Property Development Company (UPDC) Plc, agrees, lamenting the enormous impact infrastructure deficit has on the housing sector.
Oguniran, who spoke during a courtesy visit to his company by the management of BusinessDay Media Limited, explained that the high cost of housing was as a result of the challenges posed by lack of infrastructure.
“Infrastructure constitutes 10-15 percent of construction cost in this country, and as developers, we are in business to make profit and so, ultimately, these costs go to the buyers”.
He added: “Government is talking about affordable housing, but if I don’t have free land and have to provide my own infrastructure, both primary and secondary, I cannot deliver housing at affordable price”.
He canvassed a reform agenda in the housing sector in which all the obstacles to affordable housing delivery have to be addressed holistically.
For accelerated infrastructure development, Ezekwesili suggested sound macroeconomic policies to enhance stability and reduce uncertainty of price levels.
CHUKA UROKO
