Nigeria must urgently accelerate privatisation, unlock private capital through public markets, and rethink how it finances infrastructure if it is to overcome its fiscal constraints and deliver sustainable growth.
The Chief Executive Officer of Chapel Hill Denham, Bolaji Balogun, said in an interview with Proshare on the theme: ‘Infrastructure, Fiscal Space, and Capital Market Funding.’
Balogun argued that government resources alone are structurally insufficient to meet the country’s development needs, warning that the current fiscal approach risks underdelivering on critical infrastructure.
“No government in the world has the ability to fund all of its developmental needs… the bulk of the financing to solve developmental needs or what we describe broadly as the SDGs will come from private capital sources,” he said.
He stressed that the state’s role should be limited to enabling investment rather than directly funding projects.
“What the government needs to use its wallet to do is really to be an enabler,” Balogun maintained.
He pointed to global capital markets as the most viable channel for mobilising long-term funding, noting that “the deepest pools of capital worldwide sit inside of public markets.”
While adding that private-sector execution tends to be more efficient, he said, “You are likely to find that the procurement in the private sector is a lot tighter and therefore the spend is a lot more efficient.”
Balogun also raised concerns about the composition of Nigeria’s budget, noting that while nearly half is classified as capital expenditure, a significant share is not directed toward productive infrastructure. In practice, he estimated that only about a fifth of spending translates into investments in critical sectors such as transport and power.
A central pillar of his argument was the need to shift infrastructure financing decisively into local currency to avoid exchange-rate shocks.
“The currency of your infrastructure debt must be predominantly local currency if not all you are doing is impoverishing your people, because if you finance your infrastructure in someone else’s currency every time there’s a currency devaluation, you simply get indigestion,” he warned.
Drawing lessons from Nigeria’s power sector, he said operators who financed acquisitions with dollar-denominated loans have struggled under repeated devaluations.
“In this thing that you’re borrowing dollars for, do you collect dollars? … If you are not collecting dollars, why are you borrowing dollars?” he asked.
Balogun further highlighted structural inefficiencies in the allocation of domestic capital, particularly pension funds, which he noted are heavily concentrated in government securities despite the private sector accounting for the bulk of economic activity.
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He framed this as a broader development challenge, arguing that risk capital must flow to entrepreneurs to drive job creation.
“It’s entrepreneurship that creates jobs, it’s not government,” Balogun said.
Touching on Nigeria’s broader fiscal positioning, Balogun argued that the country has yet to fully understand or articulate the value of its natural assets, which he believes could significantly improve its credit profile and financing capacity.
“The biggest problem Nigeria has is that Nigeria itself does not understand its balance sheet and foreign markets do not understand Nigeria’s balance sheet,” Balogun said.
He called for the establishment of a centralised “deal room” to catalogue and quantify assets ranging from hydrocarbons to minerals and agriculture, suggesting that even partial monetisation could materially ease debt pressures.
“Nigeria has all of these other what I would describe as natural capital assets that nobody has quantified… You sell a small stake right in Nigeria LNG, okay, you can pay off all of Nigeria’s Eurobond debt,” he said, adding that “Nigeria’s tax base is a pimple compared to Nigeria’s natural capital.”
Beyond financing, he said, a clearer understanding of resource endowments could strengthen Nigeria’s position in global trade.
“When we understand what we own, we’re also going to understand our power in the marketplace… this deal room is not just about you creating a deal room for sale… It’s actually creating a platform, a reservoir of information and knowledge that will make us much more powerful in our global trade,” Balogun said.
In his recommendations to policymakers, he urged the president to accelerate privatisation, fast-track the establishment of a natural capital “deal room,” and address the electricity subsidy, arguing that decisive reforms would unlock investment and accelerate growth.
He maintained that privatisation, if properly executed, would broaden wealth creation across the economy.
“Privatisation leads to a very significant transfer of wealth to all of the people,” Balogun said.
While acknowledging recent efforts to stabilise fiscal and monetary conditions, Balogun added that Nigeria must now move from groundwork to execution, scaling reforms quickly to translate macroeconomic stability into tangible prosperity.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
