Moody’s Investors Service, a global credit rating agency, has said Nigeria’s infrastructure is behind most emerging market peers and needs at least $3 trillion to bridge the over 30 years infrastructure gap.
The agency disclosed this on Sunday during its first report on Nigerian infrastructure.
According to the report, the low tax base along with weak institutions and governance frameworks are hindering investment in infrastructure.
It would be recalled that the International Monetary Fund (IMF) had blamed Nigeria’s rising debt servicing cost and weak revenue generation for the nation’s low infrastructure and other capital expenditure in the country.
The Fund, therefore, compelled Nigeria to up revenue generation through the increase of Valued Added Tax (VAT) and the introduction of cost-reflective electricity tariffs to support weak government revenue, especially at a time when oil revenue has dropped by about 50 percent.
In the report, Kunal Govindia, the Vice President and Senior Analyst at Moody’s Investors Service, was quoted as saying that Nigeria’s fast-rising population will compound the nation’s pressure if nothing is done to arrest infrastructure deficit on time.
He explained that the COVID-19 pandemic has compounded the already low government funding capacity and poor customer affordability.
“Its low government funding capacity and customer affordability has been weakened further by the COVID-19 pandemic and low oil prices,” he said.
The report noted that “Financial guarantors, multilateral development banks and local institutional investors will be important in helping finance infrastructure development.”
