Key players in the nation’s construction sector have called for the involvement of indigenous contractors in the proposed Infrastructure Company (INFRACO).
President Muhammadu Buhari recently approved the establishment of the infraco, a public-private partnership (PPP)- infrastructure company with an initial seed capital of N1 trillion ($2.4 billion) to help address Nigeria’s huge infrastructure deficit.
The start-up funding will come from the Central Bank of Nigeria, the Nigerian Sovereign Investment Authority, and the Africa Finance Corporation. Nigeria requires at least $3 trillion over 30 years to close its infrastructure deficit, says Moody’s Investors Service in its new report.
“Although the creation of the company is seen as a welcome development, the exclusion of the contractors, may not steer Nigeria’s path out of her infrastructure funding challenges,” the Director-General, Federation of Construction Industry (FOCI), Mrs. Olubunmi Adekoje said.
She told The Guardian that FOCI was not aware of the formation of the company even though; it was what they have been clamouring for years. The association expressed hope that the company will not end up like other government organisations.
Adekoje said FOCI has also written to the Central Bank of Nigeria (CBN) on the need for the federation to be involved without response.
Another group – the Association of Indigenous Construction Contractors of Nigeria (AICCON) said they are engaging the Federal Government and CBN on the formation of Infraco.
The association in a letter to the Vice President, Prof. Yemi Osinbajo, who doubles as the coordinator of the company, noted the non-existence of Nigerian government support in funding indigenous contracting firms, like the Chinese Government is doing to the Chinese companies in Nigeria.
In the letter signed by its president, Otunba Oluranti Lekan-Osifeso, the association is calling for the inclusion of its general secretary, Otunba Muyiwa Ibeun in Infraco board of directors to ensure indigenous representation in the company.
Similarly, in another letter jointly signed by its president, Lekan-Osifeso, and general secretary, Ibeun, the association wants 10 per cent of N1 trillion, to be earmarked for indigenous contractors, saying “if you leave all this fund at the hands of foreigners there will definitely be capital flight.”
According to them, their involvement, considering the existing administrative structure and expertise will enhance the required delivery of the Infraco and the Federal Government investment will be justified. It will also ensure viable investment opportunities by reducing risks associated with infrastructure project development while ensuring international best standards.
They outlined other advantages of their involvement to include reduce capital flight, ensure economic development, accelerated project execution, increase employment opportunity, improvement in the security situation, minimise chances of modern colonisation, building local capacity, and minimise corruption and money laundry.
Also, the Managing Director, Dutum Company Limited, Temitope Runsewe, an engineer, said the new company is not in conflict with the infrastructure bank because banks only fund infrastructure projects.
He said the Federal Government plan is to create a vehicle specifically for funding large-size scale infrastructure projects in the country.
Runsewe said the infrastructure banks have been in existence and probably have some encumbrance, which the federal government noticed and decided to form another company.
He stressed that one of the things, which contractors found fascinating in Infraco is that in any contract with the federal government, the company will pay the contractor directly.
Runsewe said: “They can even create almost a quota system that insists that the minimum percentage is taken advantage of by local contractors.
“If you look at the history of contracts that have happened in the past, all the monies end up with foreigners.
“Except our government decides deliberately to help indigenous capacities, we are definitely going to have a capital flight. It is not a function of Infraco or not, it is the function of how the country has been run.”