Infrastructure Financing and Urban Development in Nigeria

The availability of adequate infrastructure facilities is imperative for the overall economic development of any country. However, developing countries like Nigeria are particularly bedeviled by issues of adequate infrastructure financing and this has great consequences on its citizenry. The aim of this study is to evaluate infrastructure financing strategies and its effect on urban development in Nigeria with a view to providing information that will guide policy makers in the country particularly and similar developing economies in general in making informed decisions on their infrastructure investment strategies. The theoretical research approach was adopted for this study. The study revealed that inadequate investment in basic infrastructure (due to severe budget constraints) and the rapid rate of urbanization in Nigeria is putting considerable strain on the nation's limited infrastructure. Hence, there is a need for large and continuing amounts of investments in almost all areas of infrastructure in Nigeria. Similarly, investment in maintaining existing infrastructure has suffered gross neglect, leaving the country with degraded and inefficient infrastructure services; this is compounded by unprecedented urban growth in major urban centers such as Lagos, Abuja and Port-Harcourt. This has resulted into the explosion of informal settlements (slums) in and around these major cities. This ugly situation is occasioned by mainly lack of long-term funds for infrastructure financing; uncertain political/economic environment; fear of policy reversals by successive governments as typical infrastructure projects span over long periods, etc. In Nigeria, the government has been the sole financier of infrastructural projects and has often taken responsibility for implementation, operations and maintenance as well. There is a need for paradigm shift in this respect as this may not be the best way to execute/finance these projects. It is obvious that the government alone cannot adequately shoulder the responsibility of infrastructure financing, therefore, to ensure urban development in Nigeria; this study recommends the involvement of the private sector in infrastructure financing. Public-Private Partnerships (PPP) offer a promising solution to the financing needs of the country as it could attract foreign investments. It is recommended that infrastructure investments should be made in such a way as to recover the invested resources through a system of user charges. This means that the services of investment projects in the country should no more be continued as a free good.