Nigeria, largest economy on the African continent, plans to set up a US$ 25bn infrastructure fund to invest in the transport and energy sectors in Africa’s most populous nation, a spokesperson for Vice President Yemi Osinbajo stated last week. Laolu Akande said money for the planned fund would come from local and international sources including Nigeria’s sovereign wealth fund and domestic pension funds. “The vice president disclosed that other sovereign wealth funds have already indicated an interest in the fund, which would be used to address the nation’s decaying road, rail and power infrastructures,” said Akande. He did not say when exactly the fund would be set up.
The nation of 170 million people is Africa’s top oil producer, but it requires infrastructure development to help boost economic growth. The West African nation’s economy, the biggest on the continent, has been hammered by the fall in oil prices. The country relies on crude exports for around 70% of government revenues. Osinbajo, who has been asked to oversee economic policy by President Muhammadu Buhari, referred to the infrastructure fund proposals while speaking to diplomats, including ambassadors from Italy and Canada, the vice presidency said in a statement. Osinbajo also reiterated the administration’s view that Nigeria’s currency, the naira, does not need to be devalued, the statement said. “It is not a solution. We are not exporting significantly. The way things are, devaluation will not help the local economy,” he was quoted as saying.
His comments come days after former central bank governor Lamido Sanusi said Nigeria would have to devalue and loosen monetary policy to stimulate its economy. The naira was officially devalued last November and underwent a de facto devaluation again in February. Godwin Emefiele, the current central bank governor, has repeatedly said the currency was “appropriately” priced and has ruled out another naira devaluation.