Fashola disclosed that Infrastructure remains the Strong Catalyst in Economic Development

A country’s economic development is fueled by its infrastructure, according to former Works and Housing Minister Babatunde Raji Fashola.

“Such a position is tantamount to economic heresy in the face of the contrary and preponderant empirical evidence available in global developmental economics,” Fashola said in response to those who do not think that good infrastructure grows the economy during his keynote speech at an infrastructure promotion event recently held in Lagos.

With a pointed declaration, the former minister said that infrastructure is still a powerful driver of economic expansion. Fashola proposed that industries such as tourism and entertainment, among others, require infrastructure in order to grow the economy, given the challenges that are commonly cited as the reason why important economic sectors are stressed. He further stated that the current state of affairs explains why talent is not being sufficiently rewarded to increase the GDP of the country. “I have to admit, building companies are currently the most legitimate businesses operating in the most legitimate ways,” he stated. The explanation is straightforward: because they outsource their jobs, it is easy to argue that they are significant contributors to the national wealth. Additionally, once you give them money, you will immediately experience a spiral and multiplier effect.

“Imagine the resources Julius Berger and other construction companies spent on procurements and supplies on the Apapa-Oworonsoki Motorway, Lagos-Sagamu Motorway, and Second Niger Bridge,” the former minister continued. What about the costs associated with haulage and quarry services, among other things? It is true that there is a direct and historical correlation between the development of infrastructure and the multiplier effect on the growth of nations, as exemplified by the post-World War II Marshall Plan.

While arguing that it is difficult to finance infrastructure commitments, he went on to say that using creative programmes like SUKUK, the Tax Credit Scheme, and Highway Development Initiatives are commendable steps to guarantee the growth and development of infrastructures for the benefit of society as a whole and the economy.