Derisking International Funding Using The Viability Gap Funding Options For Nigeria 

AVM RTD AKUGBE IYAMU MNSA fsi 

PRESIDENT ASSOCIATION OF ENVIRONMENTAL PROTECTION AND CLIMATE CHANGE PRACTITIONERS

CONSULTANT ON CLIMATE CHANGE AND ANALYST ON ENVIRONMENTAL POLICIES AND COMMENTATOR ON NATIONAL ISSUES 

Nigeria need modern governance that focus more on creating ecosystems where businesses flourishes naturally. Such ecosystems require strategic investments instead of endless government spending through envelope budgetary systems. That is why Viability Gap Funding indexes private investors and capital through priority budgetary system that encourages private investment. Private investors capital when effectively mobilised delivers economic growth and development, efficiency, innovation and creativity including managing expertise to compliment government efforts.

The Viability Gap Funding therefore serves as an alternative investment and initiative that helped transformed economies across Europe, Asia and Africa.

It bridges a country’s financial gaps and encourage investors to embrace projects considered socially beneficial but may not necessarily creating immediate Returns on Investments (ROI). In such circumstances, viability gap funding come in as a confidence building mechanisms.

The interesting correlation with a country’s development is that it assures investors that the country is willing to share risks in the process of delivering projects with measurable economic benefits. This is achieved by creating the desired confidence in bureaucracy where investors cease to view statecraft as deterrent, punitive discriminatory and discouraging. Viability Gap funding changes the narratives entirely.

Globally, Nations have come to realise that sustainable development relies on innovative financing models. This is because envelope budgetary system are finite while contemporary infrastructure priorities continue to expand: Industrial complexes, sustainable healthcare, sustainable agriculture, technological development hubs and renewable energy facilities and penetration that draws substantial investments. Such realities are compelling countries to embrace PPP investment guarantees such as Viability Gap Funding as a stop gap solutions.

The Viability Gap Fund is a deliberate shift from the traditional government driven development to modern economic model built around strategic partnerships with private investors . The fund is more than just another government intervention. It represents strategic economic instruments designed to unlock private capital, accelerate infrastructural development, stimulate industrial growth and capabilities to reposition Nigeria as a foremost investment destination.

In an era when countries like Nigeria is burdened with excessive borrowings and increasing competition for resources, it is highly desirable to derisk foreign investments. At this critical time of scarce resources, Nigeria need to explore other sources of funding to create financial system and mechanisms capable of attracting investors, reducing investment risks through enhanced foreign reserves thereby pushing economic opportunities for citizens.

Viability Gap Funding reflects a country’s financial system and leadership that understands the urgency and inadequacy of traditional government funding to address a country’s enormous economic growth infrastructure and massive need for development in a country of more than 250 million people( estimated)

From the foregoing, the greatest strength of viability gap funding lies in the multiplicity of investment projects that create a robust chain of economic activities. It improves a country’s employment, create positive change in household disposable income and stimulate consumer spending. The initiative compliment the traditional approach to funding by providing financial system capable of sustaining long term growth where national developments are no longer measured by completed projects.

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