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Development of Infrastructure to stimulate the Nigerian economy and case for a Nigerian National Programme Management Office (PMO)

FEATURED PAPER

By O. Chima Okereke, PhD

Herefordshire, UK


With oil prices now stabilised at a low level in the global market, the Nigerian Federal Government plans to stimulate economic activities by investing thirty percent of its 2016 budget, the first budget of the administration, on development of infrastructure. A research on the projects earmarked for funding shows that these are mostly, if not all, from the last administration which have been abandoned because of lack of fund. With the change of government in May 2015, the projects did not receive any more funding until they stopped.

This paper discusses the topic in the following headings:

  1. The government stimulation plan and projects to be reactivated.
  2. Foreign and local investors
  3. Probable criteria used to determine the projects and the implication of projects being abandoned
  4. Project management practice in governments of some advanced nations and a business justification for a National PMO
  5. Concluding remarks

1. The Government Stimulation Plan

The government stimulation plan Greatly diminished energy income has prompted Nigeria to look to private sector and foreign financing to help develop its infrastructure in a bid to stimulate its economy. The Nigerian Federal Government announced plans in November 2015 to set up a $25bn infrastructure fund for long-term projects in the transport and energy sectors. The funding should come from domestic pension funds, international investors, local capital market and Nigeria’s own sovereign wealth fund (SWF) which manages around $1.35bn [1].

In the 2016 budget, the administration of President Muhammadu Buhari has doubled capital expenditure as a share of total spending to 30%, with the focus on infrastructure development. In effect, the government is investing N350 billion (about $2 billion) to stimulate abandoned projects. The projects were among those abandoned by contractors due to a lack of money. The Minister of Finance, Mrs. Kemi Adeosun, had while speaking on Tuesday, March 22, after the National Economic Council retreat explained that the Federal Government had resolved to inject N350bn into the economy to stabilise it. She was reportedly quoted as saying that for contractors to benefit from the fund, they must show proof of the number of Nigerians that would be re-engaged [2].

Parts of the national infrastructure to be reactivated include the following:

1.1  Railways

  • A 25-year $60 billion programme to modernise the country’s railway network was launched in 2002 under the former president, Olusegun Obasanjo. Its focus is on the rehabilitation of existing tracks. According to the initial plan, local and foreign investors would provide 80% of the funding, the government should find the remainder.
  • In 2006, the government signed a contract with China Civil Engineering Construction Corporation to modernise the Lagos-Kano railway line, the first stage of a proposed three-phase upgrade.
  • The $850m Abuja-Kaduna high-speed railway was planned to be carried out by China Railway Construction Corporation.
  • In December 2015, Buhari talked with China’s President Xi Jinping, this helped stimulate progress on two additional stalled railway projects. As a result, in February 2016, the vice president, Osinbajo, announced that the Export-Import Bank of China agreed to fund two stalled rail lines. These are:

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To read entire paper, click here

 


 

About the Author

Cpmwj35-Jun2015-Okereke-PHOTOhima Okereke, PhD, PMP

Herefordshire, UK

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Dr. O. Chima Okereke
, Ph.D., MBA, PMP is the Managing Director and CEO of Total Technology Consultants, Ltd., a project management consulting company working in West Africa and the UK. He is a visiting professor, an industrial educator, a multidisciplinary project management professional, with over 25 years’ experience in oil and gas, steel and power generation industries. For example, On December 26th 2013, he completed an assignment as a visiting professor in project management; teaching a class of students on Master’s degree in project management in the Far Eastern Federal University, Vladivostok, Russia. In August and September 2013, he conducted an innovative, and personally developed training programme for seventy six well engineers of Shell Nigeria to enhance the efficiency of their operations using project and operations management processes. Before embarking on a career in consulting, he worked for thirteen years in industry rising to the position of a chief engineer with specialisation in industrial controls and instrumentation, electronics, electrical engineering and automation. During those 13 years, he worked on every aspect of projects of new industrial plants including design, construction and installation, commissioning, and engineering operation and maintenance in process industries. Chima sponsored and founded the potential chapter of the Project Management Institute (PMI®) in Port Harcourt, Nigeria, acting as president from 2004 to 2010.

Dr. Okereke has a Bachelor of Science Degree in Electrical Engineering from the University of Lagos, and a PhD and Masters in Business Administration (MBA) degree from the University of Bradford in the UK. He also has a PMP® certification from the Project Management Institute (PMI®) which he passed at first attempt. He has been a registered engineer with COREN in Nigeria since 1983. For many years, Total Technology has been a partner for Oracle Primavera Global Business Unit, a representative in Nigeria of Oracle University for training in Primavera project management courses, and a Gold Level member of Oracle Partner Network (OPN. He is a registered consultant with several UN agencies. More information can be found at http://www.totaltechnologyconsultants.org/.

Chima is the publisher of Project Management Business Digest, a blog aimed at helping organizations use project management for business success. Dr. Okereke is also an international editorial advisor for the PM World Journal and PM World Library. He can be contacted at [email protected]  or [email protected].