Infrastructure spend on 8,961 projects in Lagos estimated at N1.13trn

… as Nigeria requires 2% of GDP to maintain infrastructure stock

The last eight years have seen mas- sive infrastruc- ture develop- ment in Lagos State, Nigeria’s commercial nerve centre, and it is esti- mated that N1.13 trillion was expended to execute 8,961 projects within this period when Babatunde Fashola superintended the affairs of the state as governor.

This amount was a sig- nificant part of the N2.749 trillion budgeted for the same period, underscor- ing the high premium the state places on infrastructure provision to cope with its 18 million population said to be growing at 3 percent per annum.

Asides its numerous roads infrastructure projects, Lagos has also embarked on other ambitious infrastruc- ture projects, which Olasupo Shasore, president, Lagos Court of Arbitration, listed as Eko Light Rail Project, which aims to decongest traffic in Lagos; the Metro Blue Line, which will move commuters from Marina to Okokomaiko, among others.

Shasore, who gave these hints in his keynote speech at the 2015 Facilities Man- agement (FM) Roundtable hosted by Alpha Mead Fa- cilities Management and Services Limited in Lagos, in commemoration of this year’s World FM Day, was represented at the event by Erejuwa Gbadebo, CEO, Cluttons Nigeria.

Nigeria as a whole is un- derweight in its infrastruc- ture stock and, according to Shasore, the country’s core infrastructure stock is esti- mated at only 35-40 percent of GDP in contrast to inter- national benchmarks of 70 percent of GDP, pointing out that this low value has been driven by historically low public and private spending on infrastructure.

The National Integrated Infrastructure Master Plan (NIIMP) says Nigeria re- quires about $3.05 trillion (N485trn) to provide quality infrastructure over the next 30 years, with an estimated cost of N166 billion required for its phase 1.

“With Nigeria’s perfor- mance on the provision of funding for infrastructure standing at less than 25 per- cent, the growth potential is clear for all to see,”

Shasore noted, adding that mainte- nance costs would also grow significantly as infrastruc- ture stock increased.

“According to global benchmarks, maintenance spend should amount to approximately 2 percent of GDP, which translates into a total of about $23 billion per annum,” he said.

Analysts see very strong correlation between infra- structure and real estate, which has demand-supply gap of 17 million units, re- quiring N60 trillion ($300bn) to bridge on an estimated average cost of N3.5 million ($23,333) per housing unit.

This correlation is reason for the high level of ten- ancy in urban centres, and Rilwan Bello-Osagie, man- aging director/CEO, FSDH Merchant Bank, explained that about 85 percent of the urban population lives in rented accommodation, spending more than 40 per- cent of their income on rent, pointing out that “90 percent of the houses in these areas are self-built mainly due to lack of mortgage financing and less than 5 percent have formal title registration.”

The long-term solution to the country’s infrastructure deficit lies in both public and private sector opera- tors in the real estate and infrastructure space starting to build resilience for future challenges, Femi Akintunde, Alpha Mead’s CEO, said.

CHUKA UROKO