National Financing Strategy for Nigeria to Access Additional Sources of Finance for its Development Nigeria requires an estimated $3 trillion by 2044 to meet its infrastructure needs but generates only $16.55 billion in annual revenue, leaving a large financing gap. The strategy proposes leveraging development partners and private investment through public-private partnerships. It recommends reforms like tax increases, export diversification, and transparency to boost domestic resources and attract foreign financing. Nigeria will work with multilateral banks by strengthening private-public collaboration, issuing sovereign bonds, improving resource mobilization and governance, and integrating sustainability into its financial system to address barriers to accessing funds.

1. National Financing Strategy for Nigeria to
Access Additional Sources of Finance for its
Development

2. Country Statistics
KEY ECONOMIC STATISTICS 2017 2016
GDP $375.8B $404.7B
GNI $364.3B $395.95B
GOVTREVENUE $7.1B $5.7B
FDI $3.49B $4.4B
ODA $3.35B $2.5$
POPULATION 191M 186M
GNI/CAPITA $2,080 $2,450
NETODA TO GNI 0.90% 0.60%
PERSONALREMITTANCES $22.0B $19.7B
OTHEROFFICIALFLOWS $1.5B
IMPORTS(%GDP) 13.17% 11.50%
EXPORTS(%GDP) 13.17% 9.20%
UNEMPLOYMENT 17.46% 13.37%
GOVTDEBT $73.2B
Sectoral Distribution of ODA
Humanitarian Aid Health & Population Other Social Infrastructure
Economic Infrastructure Education Multi-Sector
Production Others
0%
10%
20%
30%
40%
50%
60%
70%
80%
Personal
Remittances
Foreign Direct
Investment
Official Dev.
Assistance
Other Official
Flows
Grants
Total Resource Receipt
Source: https://data.worldbank.org/indicator

3. Nigeria’s Budget Estimate for 2017
 Budget - $24.23billion
 Total Revenue - $$16.55billion
 Deficit - $7.65billion
 Capital Expenditure - $7.08billion
 Recurrent Expenditure - $8.6bllion
 Debt Servicing - $5.4billion
 Domestic Debt - $48.63billion
 External Debt - $13.81billion
 Revenue from Oil - $6.9billion
 % Deficit to Budget - 31.5%
 % Capital Exps to Budget - 29.2%
 % Recurrent Exps to Budget - 35.5%
 % Debt Servicing to Budget - 22.3%
 % Domestic Debt to Budget - 200%
 % External Debt to Budget - 56.9%
 % Oil Revenue to Budget – 42%
 % Revenue (Income Tax) – 15.9%
 % Revenue (Income Tax) – 4.8%
2017 BUDGET ANALYSIS
Budget exposed to oil revenue volatility due to weak fiscal environment
undermining tax revenue

4. Nigeria’s Budget Estimate for 2017 (cont’d)
2017 BUDGET ANALYSIS GOVT REVENUE $'Billion
Oil Revenue 6.91
Company Income Tax 2.63
Value-Added Tax 0.79
Customs & Excise 0.91
Independent Revenue 2.84
Recoveries 1.84
Sundry Income 0.64
Key CAPEX Items $'Billion
Works, Power & Housing 1.80
Transportation 0.79
Education + UBE 0.19
Special Intervention 0.49
Defense 0.45
Water Resources 0.34
Health 0.18
Agric & Rural Dev 0.38
Interior 0.21
Spending on Education is about 1.7% of GDP and Health only 0.6%. These spending in
these critical sector will drag the attainment of SDG.

5. What are the Estimated Financing Needs for the Country’s
Development?
 Nigeria is currently faced with huge infrastructural gap that has hindered its desire to exploit its rich natural and human resources to
stimulate its development. For instance, in spite of the country’s huge oil and gas, sunlight and hydro resources, Nigeria cannot
generate enough electricity to drive its development. The country’s infrastructure deficit has continued to stifle its economic growth.
The challenges of the absence of critical infrastructure continue to impact negatively on the cost of doing business,
investment, and capital inflow into the country.
 Nigeria's GDP is growing below its population growth rate of 2.6%. The country is expected to become the third-most
populous country in the world by 2050. This has serious implications for economic and human development in the absence of
adequate funding. According to an Oxfam report in 2017, Nigeria was ranked 41st out of 41 countries in Africa for spending on
healthcare, education and social security compared to South Africa that was ranked 2nd with a score of 0.512.
 Nigeria has the highest number of out-of-school children in the world. According to UNICEF, 10.5 million children are
believed to be out of school, a figure that represents approximately 20% of the total statistic. The national budgetary allocation to
the Education sector in 2017 of 7.3% was way below the UNESCO benchmark of 15% to 20%. In 2017, the education
budget was N544bn, of which N95bn was allocated to universal basic education (UBE) and N330bn to tertiary education. To close
the funding gap of N572 billion, the 2017 education budget should be in the region of N1.1tn.
 The African Development Bank (AfDB) has projected that Nigeria’s Infrastructure financing needs will grow to $3trillion by
2044. This has been accumulated at $100billion annually.
 In its report, the Nigeria’s Infrastructure Concession Regulatory Commission (ICRC), had noted that the total amount of funds
required to provide quality infrastructure in Nigeria over the next six years is about $100 billion. They estimated that while about
$60 billion would be required for the oil and gas sector; about $20 billion to revamp the power sector; $14
billion for road; and between $8 and $17 billion for rail tracks. Some other sectors that require huge investments
include housing and highways, ports, airports, dams, bridges and tunnels, water and telecommunication.
 It is very obvious from the revenue and expenditure profile of the government that Nigeria can no longer rely on its yearly budgets
to fund infrastructure development. hence the need for partnership with investors through a public private partnership
(PPP) to attract private funds to deliver such projects.

6. Social Infrastructure Deficits – Education & Healthcare
Culled from PWC Report: https://www.pwc.com/ng/en/assets/pdf/adopting-endowment-funds.pdf

7. The Available Sources of Finance International and
Domestically from both Public and Private Finance
 Official Development Assistance (ODA) – it comes as grants and
concessional loans from Development Assistance Committee (DAC) donors.
 Beyond ODA Flows (BOF) –
i. Other Financial Flows (OOF) from bilateral donors and multilateral
organizations.
ii. ODA-equivalent grants and concessional flows from non-DAC
donors.
iii. Philanthropic assistance from Foundations
iv. International Sovereign bonds
v. Climate finance
 Domestic Resource Mobilization (DRM) – Government revenues (taxes,
royalties and others).
 Foreign Direct Investment (FDI).
 Personal remittances
 Capital Market

8. Strategy to Access the Required Financing for Development
 Deployment of the World Bank’s Country Private Sector Diagnostic tool that will systematically help to identify sectoral
opportunities and policy reforms needed to access these, where the private sector can generate growth, create employment
and contribute to the competiveness and efficiency of the country’s economy. At a time like this when the public sector
finances are extremely pressured, this tool will help in crowding in the much needed transformative private investment and
concessionary development finance.
 Explore more joint partnership with the World Bank Group to strengthen the country’s local capacity to conceptualize and
develop projects, and increasing project’s bankability through standardization, guarantees and other risk mitigation
programs. This could also be achieved by support the scaling up of IFC/MIGA engagement in Nigeria market.
 Tax revenues remains at about 1% of GDP compared to the minimum requirement of 15% that is needed for an emerging and
developing economies to achieve SDG. Other ECOWAS member states generate an average of 4% of their GDP from VAT alone.
Implement World Bank and IMF recommendations for a more comprehensive tax reform that could help increase the tax-to-GDP
ratio by about 8 percentage points. Increase VAT to about 10% and possibly tax personal remittances. However, taxes should not get
in the way of growth and development. Tax payment system should be simple and preferential treatment should be avoided. Most
importantly, Government must ensure that when revenue is spent it leads to improved service.
 Deliberate policy framework to encourage the diversification of production and increase in export. Lack of competition is one of the
most important constraints to private investment. Non-oil revenue mobilization contributes 3-4% of the country’s GDP, which makes
it one of the least in the world. It is an unfortunate reflection of weaknesses in revenue administration systems and systemic non-
compliance. Non-oil export remains very critical in driving competitiveness, as the country exposes itself to global competition,
which will help all actors to join hands to build a common interest to get better.
 Attracting additional financing from development partners and other private sector finance providers will require that the country’s
economic development blueprint has an explicit guidelines on how to link the broader macro-economic policies, such as those
targeting private investment.
 Support IDA initiatives for Private Sector Window funding by offsetting risks and other impediments to investment.

9. How Nigerian will you work with multilateral development banks to
address barriers to accessing these sources of finance?
 Supporting Total Official Support for Sustainable Development (TOSSD). This program will incentivize
broader external finance for development as a complement to Nigerian’s domestic resources, which has remained very
weak. attract private funds to deliver such projects.
 Strengthen Private-Public collaboration for transformation through the following steps: Build a shared
vision; establish a strong inter-agency department to coordinate government role. This will foster strong networks,
information sharing and articulation of incentives for collective action; and set shared performance standards and
encourage feedback and learning.
 Issuance of more International Sovereign bonds whose subscription will be secured by sustaining economic
performance and good macro-economic prospects.
 Increase the Domestic Resource Mobilization through an effective fiscal policy. The international finance providers
will need the country to meet its counterpart funding in any of the projects that will be embarked on, hence, a minimum
revenue mobilization from the government will provide the needed comfort.
 Ensure transparency in public finance as strong governance structure will encourage additional investment. Medium Term
Expenditure Framework (MTEF). It will help to champion Public Expenditure Management system that aggregates fiscal
discipline, allocative efficiency and technical efficiency.
 Putting in place Integrated National Financing Frameworks. This will enable us make policies that will exploit
synergies and manage possible trade-offs across policies. It will also help mobilize different types of financing needed to
fund our infrastructure deficit, education and healthcare. This policy alignment tools and programs will advance
sustainable and inclusive growth.
 Subscription to the Financial Sector Assessment Program and deploy statistical tools to determine the size of
informal sector and underground economies considering that cash transactions leaves no audit for tax computation.

10. How Nigerian will you work with multilateral development banks to
address barriers to accessing these sources of finance? (cont’d)
 It is very obvious from the revenue and expenditure profile of the government that Nigeria can no
longer rely on its yearly budgets to fund infrastructure development. Hence the need for partnership
with investors through a Public Private Partnership (PPP) to attract private funds to deliver such
projects.
 Attracting additional financing from development partners and other private sector finance providers
will require that the country’s economic development blueprint has an explicit guidelines on how
to link the broader macro-economic policies, such as those targeting private investment.
 Strengthen Private-Public collaboration for transformation through the following steps: Build a
shared vision; establish a strong inter-agency department to coordinate government role. This will
foster strong networks, information sharing and articulation of incentives for collective action; and set
shared performance standards and encourage feedback and learning.
 Promoting financial system that integrates sustainability into its operations, including the full costing
of the positive and negative externalities.

11. Thank you