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The Central Bank of Nigeria, CBN, has said that the Infrastructure Corporation of Nigeria (InfraCorp) set up by the Federal Government to support critical infrastructure will raise N14 trillion through local and foreign debt markets.
The apex bank said more than 50 per cent of the fund to be raised would come from local debt market, adding that the instrument would be mostly in naira.
The CBN governor, Godwin Emefiele, who disclosed this at a briefing to mark the end of 12th Annual Bankers Committee retreat in Lagos, said: “With a seed capital of N1 trillion (about $2.5 billion), the CBN, in partnership with the African Finance Corporation, AFC and the NSIA, set up the Infrastructure Corporation of Nigeria (InfraCorp) to raise over N15 trillion and support critical infrastructure investments.
‘’The Corporation will target strategic infrastructure projects to catalyse and strengthen growth. Infracorp is expected to set the standard template that will help in enabling greater private sector funding for public infrastructure projects in Nigeria.”
While commenting on Bridge money, he said, “There is Bridge funding for the three government projects already started. At the time the federal government approached us we provided N170 billion so that those government projects can go on, the entire scope of those projects is slightly above a trillion. Well the numbers are still being work on but by the time the asset managers come on board the remaining aspect of the funding would be worked out and it would come from debt.
He said: “Equity is being contributed by CBN, AFC and NSIA. One trillion naira out of N15 trillion will come from equity and the remaining 14 trillion will come from debt market. The substantial money will be in naira in local currency, the banks have large pool of funds, pensioners also have large pool of funds, and we are reasonably optimistic that more than 50 per cent of the fund would be raised before we start looking for foreign investors. We will as much as possible to limit the debt to local currency. Within the Nigeria financial system, there is a lot of idle capital or fund that could be channelled through InfraCorp with the way it was set up”.
Speaking on key resolutions taken at the retreat, Emefiele said that Bankers Committee among other things resolved to position Nigeria’s economy for inclusive sustainable recovery, adding that the committee underscored the importance of collaboration between the fiscal authorities, the CBN and the banking industry in building the needed resilience for economic growth.
He said: “As part of our efforts to support greater expansion of economic growth and job opportunities in Nigeria, the Bankers Committee dwelt on its efforts at supporting the growth of Nigeria’s real sector to foster the growth of our non-oil exports.”
The key resolutions from the Banker Committee, the CBN Governor said include: “Distributed Ledger Technology: The Committee highlighted the benefits of distributed ledger technology such as enhanced financial Inclusion, market expansion, increased access to credit, better data sharing and information security, as well as cost savings for the banking industry.
“To accomplish this, we itemized some ideas to explore: Centralized Know Your Customer, KYC platform, Payments Transparency Platform, Collateral Management and Documentation Verification for credit lines, Data sharing and information security and tokenization –that is creating a transparent platform to trade financial assets.”
With respect to export facilitation and import substitution to strengthen domestic productivity, Emefiele disclosed that the Committee noted the need for fact-based selection of high-impact commodities and one services sector activity (such as fashion, media, IT) to focus for interventions and initiatives.
“This is in order to boost local production and promote exports e.g through increased financing. In this respect, a taskforce will be set-up to ensure that the end-to-end process from farm to ports across the value chain is guaranteed.
“The Committee equally agreed to identify specific ports at designated locations to focus on agriculture products with supporting infrastructure closer to production and across the value chain.
We will pursue capacity building for Customs for export e.g. through incentives for export facilitation.
The Committee agreed to ensure consistency in the policy framework through improved collaboration with Customs, relevant ministries and other agencies.”
On resilience for sustainable inclusive Growth: Emefiele said: “The Bankers’ Committee recognizes the vulnerability of the Nigerian economy to shocks in oil prices and the significant impact of the COVID-19 pandemic. The Subcommittee will focus on improving the financial systems ability to anticipate risks and strengthening capacity to recover from shocks.
The Committee will focus on specific initiatives and programs to broaden the economic base in ways that address employment generation, poverty reduction and increase diversification for increased fiscal revenues.”
On the monitoring framework, the CBN Governor said: “Over the next few days, the Bankers’ Committee will finalise the strategy, governance framework action plan and assign responsibilities for implementation for the Bankers’ Committee program for 2022 that will achieve the desired results and outcomes. We will on an ongoing basis, monitor the progress of implementation and as well as the impact of our actions on Nigeria’s economic development goals and objectives.
The Sub-committee on Economic Development and Sustainability will co-ordinate execution of the programme and provide feedback to the Central Bank of Nigeria and the Bankers’ Committee.”
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