Tackling Nigeria’s infrastructure deficit with green bonds
To address Nigeria’s huge infrastructure deficit in a sustainable manner and position the economy for greater competitiveness, capital market experts have called for more private sector involvement in the sovereign green bond initiative.
The stakeholders, who spoke in a chat with The Guardian, insisted that more domestic investment is needed in the green bonds initiative to enable the country wriggle out of perennial infrastructural deficit that had stymied economic growth and constrained its position in the global market.
According to them, massive investment in green bonds would boost infrastructure development, which would ultimately bolster economic performance, and increase purchasing power of the people.
Furthermore, they argued that the issuance of green bond would provide an avenue to raise capital in the market thereby enhancing liquidity and deepening the market.
For instance, the Director, Climate Finance Advisor, Climate Bond Initiative (CBI), Dr Jubril Adeojo, said the private sector must tap into the green bond and other ethical bonds in the capital market to enhance rapid and sustainable development.
“For infrastructure, Nigeria is a place that even to get a good road is a challenge; the only infrastructure we have in Nigeria is cars, whereas we can tap into the railways, we can tap into the rapid bus system, even the ferries.
“It is for us to look inwards and have the government to give us enabling environment by giving us a long concession, a long licence and permit to encourage and engender investment into this country, even to be able to harness the local funds that we have in Nigeria, will make all these work for better.
“With active participation of the private sector, the green bond and other ethical bonds will definitely transform the situation of our infrastructure deficit. The reason is because, one of the reasons why we have infrastructure deficit is because a lot of money that suppose to go into infrastructure go to ‘white pocket’ and the job will not be done.
“But with the green bond, which is about accountability and transparency, for every green bond issued to construct a road, or for road transport network, you can rest assured that the proceeds will be used for that purpose, and with that the project will be sustainable and everybody will be the better for it.”
The Senior Vice President, Economic Development Division, FMDQ OTC Securities Exchange, Emmanuel Etaderhi, said active private sector participation in green bonds and other ethical bonds will definitely transform the deplorable state of infrastructure and boost the economy.