Infrastructure gaps deepen as population surges

In this report, HENRY FALAIYE examines how the growing population is exacerbating Nigeria’s infrastructure deficit.

As Nigeria’s population rapidly expands, the country faces growing challenges in infrastructure development. The infrastructural deficit, exacerbated by this population surge, is increasingly evident across various sectors, including transportation, housing, healthcare, and roads, among others. The demand for essential services and amenities is rising sharply, putting significant strain on the existing infrastructure.

 Overall, Nigeria’s infrastructure struggles are intensifying as the population continues to grow, highlighting the urgent need for governments to address this problem by providing sustainable solutions to address these challenges and ensure a better quality of life for all citizens.

 According to the United Nations World Population Prospects report, the current world population of 7.6 billion is expected to reach 8.6 billion in 2030, 9.8 billion in 2050 and 11.2 billion in 2100.

 With roughly 83 million people being added to the world’s population every year, the upward trend in population size is expected to continue, even if fertility levels continue to decline.

 However, among the 10 largest countries worldwide, Nigeria is growing the most rapidly. Consequently, the population of Nigeria, currently the world’s 7th largest, is projected to surpass that of the United States and become the third-largest country in the world shortly before 2050.

 From 2017 to 2050, it is anticipated that half of the global population growth will be concentrated in nine countries: India, Nigeria, the Democratic Republic of the Congo, Pakistan, Ethiopia, Tanzania, the United States, Uganda, and Indonesia.

 Similarly, Africa continues to experience high rates of population growth. Between 2017 and 2050, the populations of 26 African countries are projected to expand to at least double their current size.

 However, the concentration of global population growth in the world’s poorest countries poses a significant challenge for governments in achieving the 2030 Agenda for Sustainable Development. This agenda aims to eradicate poverty and hunger, enhance health and education systems, achieve gender equality and women’s empowerment, reduce inequality and ensure inclusivity so that no one is left behind.

 The current population of Nigeria is 229,234,291 as of Wednesday, July 10, 2024, based on Worldometer elaboration of the latest United Nations data, equivalent to 2.78 per cent of the total world population.

According to the Statista Forecast population report, demographic projections show that the Nigerian population might experience a constant increase in the next few decades. By 2050, it is forecast that the population will grow to over 377 million people.

Nigeria is not certain to see a serious financial commitment from the government towards the expansion of its largely inadequate infrastructure in 2024, PwC said in its Nigeria Economic Outlook 2024 report issued recently.

 “The government will also struggle with the maintenance of the few infrastructures that exist as it stakes much hope on other funding sources rather than financing projects from its purse.

 “Infrastructure funding may remain insufficient in 2024,” PwC noted.

 The allocated infrastructure spending budget for 2024 is N1.32tn, falling short of the World Bank’s suggested 70 per cent infrastructure-to-GDP benchmark, which is currently at 30 per cent.

 Weighed down by years of stifled growth, public infrastructures in Nigeria are dysfunctional at the best of times as the availability of such facilities lags behind a rapidly growing population, the largest on the continent, causing them to age ahead of their time by overusing these infrastructural facilities.

 According to the Infrastructure Concession Regulatory Commission, the watchdog agency that regulates the government’s public-private-partnership programmes, with 213.4 million people, Nigeria owns 195,000 kilometres of road. However, this is low when compared to that of South Africa, which runs a road network of 750,000 kilometres with a population less than one-third of Nigeria’s.

 “Limited fiscal space for public investment and difficulty attracting private investments constrain the ability to make essential infrastructure improvements,” the PWC stated.

It further highlighted the inadequate provision of ports, power, and roads that is impeding economic progress, leaving large parts of the country without essential services.

Experts said that infrastructural provision guarantees economic growth. Nigeria’s governments should, therefore, make infrastructure a top priority.

Meanwhile, the United States of America, the world’s biggest economy, has just commenced a $1.25tn ‘Decade of Infrastructure’ renewal programme. Despite being credited with the world’s third-best infrastructure, in 2019, Singapore committed $10bn per year to infrastructure renewal.

Experts claimed that the country needed between $100bn and $150bn annually over the next 30 years to close its infrastructure gap.

Dataphyte estimated it at $2.3tn, and Agusto & Co. and the World Bank at $3tn.

Nigeria ranked 24th in 2020 out of 54 African countries in the Africa Infrastructure Development Index with 23.26 points; Egypt was second with 88.3 points, and war-torn Libya was third with 82.9 points.

It noted that it had been long recognised that an adequate supply of infrastructure services is an essential ingredient for productivity and growth in any economy.

Meanwhile, much of the current international debate on ways to spur growth, reduce poverty, and improve the quality of human life in low-income developing countries has been centred on the need to promote large increases in public investments in infrastructure.

Addressing the provision of public infrastructure services in the country to meet the demands of its growing population has become a significant challenge. This is compounded by rising unemployment rates, increasing price levels, and the subsequent surge in insecurity and crime rates. Therefore, it is essential to examine the true nature of the infrastructure needed for the country’s growth trajectory. Dataphyte noted that Nigeria’s infrastructure deficit is 40 per cent short of the World Bank standard.

According to the International Trade Office of the US Department of Commerce, Nigeria’s infrastructure deficit, amounting to 30 per cent of its gross domestic product, falls short of the international benchmark of 70 per cent set by the World Bank.

With Nigeria’s population growing at a rate of over 2.5 per cent per year and an expected population of 400 million people by 2050, the US agency worried that the current infrastructure in the country was likely to be overwhelmed.

Also, the World Bank has projected that Nigeria would need to invest $3tn to reduce its infrastructure deficit. The 2019 Global Competitive Index Report ranked Nigeria 130th out of 141 economies surveyed for quality infrastructure facilities. With a score of 48.33 out of 100 total points, the country still has over a 50 per cent infrastructure deficit.

Over five years (2016–2020), Nigeria saw slight infrastructure progress in transport, power, ICT, and water. Yet, it still lags behind 23 African countries.

Inadequate infrastructure hinders sustainable economic growth despite government efforts, hampered by rural-urban migration and population growth. Robust infrastructure is vital for boosting productivity and fostering economic growth.

The provision of public infrastructure services in the country to meet the demands of the various economic agents in the face of the ever-increasing population of the country has been a major problem in the country.

Recently, the Minister of Works, David Umahi, assured road users that during his tenure he would ensure that the roads are put in proper conditions for all Nigerians. He pledged that Nigerians would witness vigour, diligence, and commitment to road infrastructure development under his watch.

Umahi added that any road constructed under his leadership would stay for more than six years without the need for maintenance.

However, experts believe Nigeria must do more to close the infrastructure deficit gaps as the population rises by the day.

Experts proffer solutions

Speaking with The PUNCH, the Chief Executive Officer of the Centre for the Promotion of Private Enterprises, Muda Yusuf, said the way the government could address the issue of infrastructure deficit was to review the budget priority.

According to Yusuf, the government must take the lead, noting that all over the world, the government takes the lead as far as infrastructure investment is concerned, especially as regards economic and social infrastructure.

He said, “It is the infrastructure that the country needs to propel economic activities to be able to support productivity and grow the economy, infrastructure is very fundamental. Changing the structure of government priority would help, because, over the years, Nigeria has been spending a lot more on re-current expenditure and infrastructure expenditures.

“Even when we talk about capital projects, it’s not all capital projects that are infrastructure projects.”

Yusuf emphasised the need to separate infrastructure from capital projects, stating that for most of the budget, the infrastructure component was not up to 10 or 15 per cent.

He appealed to the government to focus a lot more on infrastructure spending, urging it to look at other ways outside the budget to address the deficit.

 “There was a proposal on the table that the Muhammadu Buhari’s administration did not sign. It is called the Road Fund Bill to create dedicated funding specifically for road development so that the Federal Government will not be waiting for the budget before they can begin to fund road projects.

“The government should encourage private-public investment in infrastructure, but they must create an enabling framework for that to happen to reduce the risk of private sector investment in infrastructure. The PPP framework must be very robust and must inspire the confidence of private investors,” he explained.

He argued that the government should create a concessionary financing window for the private sector that wants to invest in the development of the country’s infrastructure.

He also noted that fiscal policy support was very important for private sector investment in infrastructure, tax policy support and import duty support.

Also, a finance expert, Mr Adetuyor Otubanjo, said the government could leverage public-private partnerships to finance, build, and manage infrastructure projects to address the country’s infrastructural deficit amid Nigeria’s growing population.

He said, “These partnerships can harness private sector efficiency, innovation, and capital to address infrastructure needs while mitigating public expenditure to cushion the efforts of the government to provide adequate infrastructure for its growing population in the future. By sharing risks and responsibilities, these partnerships can lead to more sustainable and well-maintained infrastructure.”

Otubanjo added that successful PPPs require clear regulatory frameworks and strong governance to ensure transparency and accountability in project execution and tackle this major problem.