Federal Minister of Works and Housing, Babatunde Raji Fashola (SAN), has proposed floating a N10tn national infrastructure bond. He said it was to create and maintain a pool of funds to meet the funding gap and challenges associated with construction and completion of road infrastructure in Nigeria.
Fashola said if his suggestion was approved, it would be a viable option. He stated this while defending the 2020 budget of his ministry before the National Assembly Joint Committee on Works. The chairman of the joint panel, Adamu Aliero, had challenged the Federal Government to adopt viable alternative funding option for the completion of ongoing road infrastructure.
The minister explained that there were 540 road projects currently being constructed by his ministry across the country. Fashola said his proposed bond should be secured by the Federal Government to attract the pension fund managers. He said the pension funds administrators should be encouraged to invest in the bond as they were doing with treasury bills. He said members of the public should also be targeted to participate by investing between N10,000 and N50,000 in such bond.
He said, we should do something like launch the national infrastructure bond and this will be the responsibility of the Ministry of Finance and Debt Management Office. I had done an envelope size of N10tn that does not mean we are going to raise that money this year, but if we launch such a competitive coupon rate backed by law as a secured instrument that people can put their money into, I am confident that the money could be raised because my experience with the Sukuk fund showed that on both occasions the issuance was oversubscribed indicating that there is a wide appetite among Nigerian investors to invest in secured funds.