IMPI backs Tinubu’s borrowings, insists Nigeria needs minimum annual capital expenditure of $14.2bn on infrastructure for 10 years
One of Nigeria’s foremost policy groups, the Independent Media and Policy Initiative (IMPI) has justified the borrowings of the President Bola Tinubu administration on the ground that it is the most realistic way to bridge the country’s massive infrastructure gap.
In a policy statement signed by its Chairman Dr Omoniyi Akinsiju, the think tank argued that Nigeria’s infrastructure challenges were too vast for the annual budget to cover without the federal government resorting to borrowing.
This according to IMPI is because the country is estimated to require a minimum annual spend of $14.2 billion over the next 10 years to bridge its infrastructural deficit after considering various estimates from international bodies.
“Nigeria’s productivity and standard of living have been ascribed to the inadequacy of infrastructure over the years. While there is a seeming consensus on this assertion, there have been diverse estimates of the true value of the country’s infrastructure deficit.
“The World Bank, which categorises Nigeria as a middle-income economy, estimated the Nation’s total infrastructure stock to be approximately 30% to 35% of its Gross Domestic Product (GDP). This ratio falls well short of the World Bank’s 70% benchmark for middle-income economies. Thus, it is projected that Nigeria will need an accumulated investment of up to $3 trillion over 30 years to bridge the infrastructure gap.
“The African Development Bank (AfDB), on the other hand, estimated the value of the country’s infrastructure shortfall at $2.3 trillion, $700bn lower than the World Bank’s estimate. According to its erstwhile President, Dr Akinwunmi Adesina, Nigeria needs $15bn in annual investment over 20 years to bridge its infrastructure gap.
“The International Finance Corporation (IFC), on its part, estimated a lower figure of $2 trillion over 20 years to bridge it. Still, KPMG, the global audit firm, estimated a much lower annual infrastructure spending of $14.2 billion over 10 years, totalling a sum of $142 billion to close the country’s huge infrastructure gap.
“To establish which of the estimates can be realised in Nigeria’s perennially constricted revenue-generation circumstances, we put the different infrastructure deficit estimates to the test of probable outcomes, which determine the likelihood of specific results from a random event or experiment, often calculated as the ratio of favourable outcomes to total possible outcomes.
“Among all the estimates, KPMG’s $142 billion estimate aligned more closely with the Nigerian situation, with a probable outcome indicating that spending $14.2 billion annually over 10 years (a total of $142 billion) is a key target to bridge Nigeria’s infrastructure gap.
“Accordingly, sustained investment at this level, particularly in transportation, power, and digital infrastructure, will catalyse substantial economic growth and significantly reduce the deficit.
“While this estimate will not absolutely provide the full bouquet of required infrastructure, the investment will shift Nigeria from an infrastructure-deficient state to one with a rapidly modernised, connected, and sustainable system. Such investment could generate roughly 3 to 4 times as many jobs in the economy, significantly reducing unemployment and addressing the poor condition of road networks, enhancing air transport safety, and facilitating faster growth to support a modern digital economy, among other benefits,” it said.
While reeling out data from federal budgets in the past 25 years, the think tank noted that it was only on President Tinubu’s watch that the annual capital budget was close to what was prescribed to bridge the nation’s infrastructure gap.
“We note at this juncture the near-perennial low budget implementation threshold since 2000, with the obvious inconsequentiality of appropriated expenditure on infrastructural development.
“However, at this time, we acknowledge the record-breaking fiscal milestone set by the President Tinubu-led federal administration, which matched and exceeded KPMG’s $14.2 billion annual infrastructure spending estimate for the first time in Nigeria’s fiscal history.
“Based on the approved 2026 Appropriation Act, the Nigerian government significantly expanded its fiscal framework, with the total budget breaking records. Remarkably, the budget allocated $23 billion (roughly half the total budget) to infrastructure and other capital expenditures.
“Without doubt, the 2026 budget is indicative of a new vista in the nation’s fiscal firmament with emphasis on securing debts for infrastructure development.
“The approved $23 billion infrastructure budget is about the same size as the budget deficit to be financed almost entirely through debt,” IMPI added.
