Sustainable infrastructure development in sub-nations of Nigeria: what alternative financing options are open amidst constrained budget?

Abstract

Purpose This paper aims to examine the alternative financing available for sustainable infrastructure development in Nigeria’s sub-nations. Specifically, the study question is: what financial vehicles do sub-nations seek most, and what are the underlying reasons for their preferences? Design/methodology/approach The study used a two-round Delphi method, using a questionnaire to gather data from high-ranking government officials in states that have localised sustainable development projects in Nigeria. Findings Results show that fundamental to sub-national sustainable infrastructure projects are federal allocations, pension funds, private equity, bonds and concessionary grants. Sub-nationals prefer these options, especially the emphasis on private equity, and the concessional funding through catalytic or blended finance because of their relatively lower or below-market interest rates. Practical implications The practical significance of this study is that the state’s policymakers can now identify appropriate strategies that enhance the shift towards these sustainable financing options, which will serve as a key catalyst in their 2030 and beyond vision to accelerate their state's infrastructure climate complaint. Equally, investors possessing funds with such attributes will gain an understanding of a prospective market within Nigeria’s sub-nation. Social implications This study aims to improve the development of sustainable infrastructure in Nigeria’s sub-nations, which would have a beneficial effect on society by mitigating the effects of climate change. Originality/value The recommendations of this study can contribute to the development of innovative financial models for sub-national infrastructure development, thereby reducing reliance on revenue generated from fossil fuels.