To address a serious road infrastructure deficit in the country, the Federal Government and the National Assembly has resolved to sell bonds to raise N10 to raise adequate funds to rehabilitate and ensure completion of 540 road projects.
This is just as the Minister of Works and Housing, Babatunde Fashiola (SAN) has agreed with NASS on the need for the nation to urgently close gaps of fund releases and yearly deficit capital budget financing, by launching a national N10 trillion infrastructure bond.
Fashola explained the bond would be launched in such a way that individuals, state and federal ministries, as well as relevant government agencies would inject their funds to finance road projects.
Fashiola also posited the bond sale would be realised only if it was backed by legislation from NASS, and added that it would be with a very competitive coupon rate.
This was the outcome of an interface between the works minister, Fashola and members of the Joint Committee of Senate and House of Representatives, at the 2020 budget defence of the ministry of works on Thursday in Abuja.
The deplorable state of roads across the country has become a matter of concern to all Nigerians as the ugly situation has caused deaths and heightened crime.
Although the federal government has consistently said it lacked adequate resources to fix the roads and close the infrastructure gap.
To salvage the situation, the National Assembly has opined that the bad situation can be tackled only if the federal government appropriates adequate funds in the 2020 budget to fix the bad roads.
It said the executive needs up to N10 trillion, in the 2020 appropriation to finance the rehabilitation, completion and maintenance of the roads.
In the 2020 budget of N10.33 trillion presented to NASS by President Muhammadu Buhari, the works ministry received highest sectorial allocation of N287.2 billion with N197.0 billion proposed for capital projects.
However, briefing the NASS members on the 2019 budget performance, Fashola recalled that the ministry had proposed the total sum of N428.4 billion. Out of the sum, he said the works sector was appropriated N251.7 billion, with N223.3 billion being allocated for capital projects.
He further disclosed that “as at October 15, 2019, only N53.3 billion was released to works sector which amount to 23.88% capital budget performance”.
Fashola said: “What I will recommend which I have addressed during my confirmation here was that we should launch the national infrastructure bond and this would be the responsibility of the ministry of finance and debt management office.
‘’I think that is one way to entice and inspire agencies like the pensions fund to invest money in a secured Government-backed instrument. They are investing in Treasury bill because it is Government instrument and it is secured.
‘’The ministry is currently undertaking a total of 540 highway projects at a total contract sum of N4.8 trillion spread over six geo-political zones in the country.
“Given the wide disparity between the facilities in unpaid certificates in the total sum of N321.1 billion and the budgetary provisions over the years, it has become imperative that the ministry prioritises its 2020 budget proposals in order to make an appreciable impact within the period 2020-2022,” Fashiola insisted.
In his remarks, Chairman of the Senate Committee on Works, Senator Adamu Alero said the committee was aware of about 540 ongoing road projects planned to be completed by the federal government in the 2020 budget.
“We require N10 trillion to build these roads. Our country is where roads are built by the government,” Alero said.
‘’People are interested in investing in the road project and require to be encouraged, by allowing them to construct, maintain while they build toll gates to recover their funds.
‘’In countries like Malaysia and Morocco, private investors are directly involved in the construction of roads, with toll gates also built on the roads to recoup their investments. Thereafter, such roads are returned to the federal government,’’ Alero said.
Source: Businessdayng
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