Babatunde Fashola, Minister of Works and Housing: Interview

Interview: Babatunde Fashola

Where are the priorities for 2021 in terms of infrastructure development?

BABATUNDE FASHOLA: The more transport infrastructure we provide the more efficient the economy becomes, resulting in more business opportunities. The ministry’s goal to improve infrastructure aligns with the administration’s efforts to bolster the ease of doing business as a means of stimulating inclusive growth where wealth and opportunities are evenly distributed across in the economy. As of mid-2021 the ministry was supervising 895 contracts that together covered 795 projects and over 13,000 km of roads across the country. The goal is to maintain a similar pace of construction and maintenance through 2022, subject to funding.

How has the Covid-19 pandemic impacted plans related to public infrastructure works?

FASHOLA: The assumptions on which Nigeria’s budget was formulated did not include a pandemic. While there have been negative effects locally, opportunities arose during the crisis as well, so we are looking at how this period can benefit Nigeria in the long run. For example, as some of our foreign contractors have been unable to return to Nigeria, we are deploying more local manpower and equipment on major projects.

To what extent is the private sector involved in developing needed infrastructure?

FASHOLA: The health of the private sector in any economy is a fair measure of how prosperous and democratic that economy is. As such, private sector investment in infrastructure is always welcome. However, there is sometimes a misunderstanding that the private sector can do everything and take the lead in developing both social and commercial assets. When it comes to commercial assets – those primarily developed for profit, such as airports and port terminals – the private sector should certainly take the lead in financing their development and operating them. It is primarily the government’s responsibility to finance and develop social assets, though, which are associated with the public good, such as transport networks. Moreover, governments often have a greater capacity than the private sector to raise funds at the level required to build large-scale infrastructure.

That said, the private sector is participating in the financing of Nigeria’s transport infrastructure at levels comparable to those in other jurisdictions. On average – whether it be in Asia, the Middle East or Europe – private capital represents about 30% of overall financing for road networks, which is approximately the level of private capital participation in Nigerian infrastructure works. Moreover, the president has approved tax credits for private companies to foster investment in public infrastructure. Companies such as Dangote Group have already taken advantage of this tax credit to build a major road leading to the Lagos Port Complex.

Through which means is the ministry addressing the housing deficit in urban areas?

FASHOLA: While urban planning and land regulation are the prerogatives of sub-national governments, the federal government articulates that the people of Nigeria deserve affordable housing as a matter of policy. To help in this regard, the ministry is conducting market research on what the public needs and building sample housing that we think the public will accept. We believe this is important because housing should be both affordable and suitable for consumer needs.

For example, through our research we found that tastes and needs often differ between those living in northern and southern Nigeria. We test the findings of our research by building model units that we put to the market, and the units will be available to consumers online once protocols are put in place to ensure transparent transactions. The ministry also provides these insights to developers that may not otherwise be aware of specific consumer preferences and demands.

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The Report: Nigeria 2022

Construction & Real Estate chapter from The Report: Nigeria 2022

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