Accountants must play critical role in financing, delivery of infrastructure projects- Report

…Says Nigeria expected to invest $618bn in infrastructure in 21 years

…Projects an investment gap of $210.3bn in Nigeria’s public sector needs

Motolani Oseni

Accounting professionals in Nigeria has been charged to play a critical role in closing the nation’s infrastructure gap by improving the selection, financing and delivery of infrastructure projects.

Association of Chartered Certified Accountants (ACCA) in its most recent joint report with Chartered Professional Accountants (CPA) Canada, obtained by The Daily Times, stated that governments need the right professional team in place, which includes the professional accountants to harness the benefits of additional investment while working to mitigate the significant risks associated with infrastructure projects.

The new report, however, disclosed that Nigeria is expected to invest $618 billion in its infrastructure between now and 2040, but projected an investment gap of $210.3 billion its public sector needs.

“Infrastructure is critical for economic and social development around the world. From the transportation networks that enable people and goods to move around safely and effectively, to the utility systems providing power and services essential to survival. And these systems rely heavily on investments and funding”, the report explained.

According to the report, the term ‘global infrastructure gap’ identifies the difference between infrastructure investment needed and the resources available to meet that need.

“African respondents from a survey of nearly 500 infrastructure specialists highlighted poor core public service infrastructure, railways, and water and sanitation as areas where the service provision falls below the global benchmark.”

Commenting on this development, ACCA’s head of Nigeria, Thomas Isibor, said: “Across Nigeria, there are a number of barriers that come into play when meeting our infrastructure needs.

ACCA and CPA Canada’s joint report suggests African infrastructure and its perceived service quality fall considerably below the levels of global peers.

“Our research highlights a clear need to prioritise tackling corruption in public infrastructure provision, and addressing a lack of political leadership. These remain the barriers to meeting African infrastructure need.

“The projected figures in this report demonstrate the vast infrastructure gap Nigeria faces in the years to come, unless remedial action is taken by the public sector today”.

Also, Director Strategy, Risk and Performance at CPA Canada, Davinder Valeri, said: “Accounting is central to successful decision-making and professional accountants can provide relevant analysis and guidance, especially when it comes to building accountability into the process. Having an accountant’s skills and perspectives on an infrastructure project team can mean the difference between success and failure.”

Recommending how to close the infrastructure gap, based on observed global good practice, the report stated that there should be a vision of future infrastructure provision and establishment of expert-led bodies to forecast infrastructure requirements and recommend projects on the basis of need.

It stated further that Nigeria must get incentives right in financing projects, monitor the interaction of off-balance-sheet liabilities and government fiscal targets.

“Tackle corruption and moral hazard professionalise the public sector finance function to empower public servants to challenge unethical behaviour”, the report proffered.

Meanwhile, Nigeria’s oil revenue which is responsible for about 70 per cent of the country’s total revenue recorded another monthly decline of N62 billion.

In fact, the shut-ins and shutdowns of some terminals by the Nigerian National Petroleum Corporation (NNPC) led to another monthly drop in the gross oil revenue that comes to the federation.

Latest data from the Central Bank of Nigeria (CBN) showed that the country’s oil receipts dropped to N410.18bn in May 2019, shedding N62.2 billion when compared to the N472.38 billion that was recorded in the preceding month of April 2019.

April’s oil revenue similarly dropped by NN44.6 billion as a result of the shut-ins and shutdowns of NNPC terminals in April 2019.

The April report from the CBN stated that the country’s oil earnings fell from the N516.88bn recorded in March to N472.28bn in April, as this also affected the gross federally-collected revenue for that month.

The development, however, did not improve, as the latest data from the country’s apex bank showed that the gross federally-collected revenue for May 2019 was N733.82bn and was lower than the provisional monthly budget estimate of N1.1tn by 33.7 per cent.

Similarly, it fell below the receipts in the preceding month by 7.7 per cent, as the CBN explained that the decline in federally-collected revenue (gross) relative to the monthly budget estimate was due to the shortfall in receipts from oil revenue during the review period.

The bank said: “Gross oil receipts, at N410.18bn or 55.9 per cent of the total revenue was below both the monthly budget of N640.21bn by 35.9 per cent and the preceding month’s receipts of N472.38bn by 13.2 per cent, respectively.

“The decline in oil revenue relative to the provisional monthly budget estimate was attributed to shut-ins and shutdowns at some NNPC terminals due to pipeline leakages and maintenance activities.”

On non-oil revenue, the CBN stated that at N323.64bn or 44.1 per cent of the total revenue, non-oil revenue fell below the provisional monthly budget estimate of N466.91bn by 30.7 per cent.

“It, however, exceeded the preceding month’s receipt of N322.93bn by 0.2 per cent. The lower non-oil revenue relative to the provisional monthly budget was due to the shortfalls in receipts from all the non-oil revenue components, except customs and excise duties” the apex bank stated.