Technology infrastructure is the backbone of digital transformation and economic advancement. In Nigeria, there is a rapidly growing demand for robust infrastructure-such as broadband networks, data centers, cloud platforms, and smart grids. However, financing these projects could present distinct challenges and opportunities to developers and project sponsors.
Nigeria has a massive infrastructure deficit with total infrastructure stock in the country amounting to 30% of gross domestic product (GDP). This falls short of the international benchmark of 70% set by the World Bank. With Nigeria’s population growing at a rate of over 2.5% per year and an expected population of 400 million people by 2050, the current infrastructure in the country is likely to be overwhelmed.
Nigeria needs up to $3 trillion over the next 30 years to bridge this gap. The fact that less than ₦3 trillion was appropriated for capital expenditure reflects the urgency to increase infrastructure spending. Sadly, the dire fiscal position of the Federal Government of Nigeria (FGN) has left little room for investments in infrastructure, a vital expenditure for an emerging economy like Nigeria.
As we delve into the overview of infrastructure needs in Nigeria, it is evident that a comprehensive understanding of the current landscape is crucial for developing effective solutions. Nigeria, endowed with abundant resources and immense potential, faces significant infrastructure deficits that impede economic growth and social development.
Let's consider key aspects of Nigeria's infrastructure, including technology infrastructure, financing models, regulatory landscape, and major construction projects.
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1. What is Technology Infrastructure?
Technology infrastructure refers to the core physical and digital systems that support modern connectivity and digital services. This includes assets like fiberoptic cables, telecom towers, base stations, and data centers, cloud platforms, enterprise software, and electronic payment systems.
These systems are essential to a wide range of sectors, including telecommunications (such as broadband rollout and ICT backbone development), power (like smart grids), public services (including e-Government and digital identity platforms), and emerging areas such as the Internet of Things (IoT), Artificial Intelligence (AI), and blockchain technology.
Conversations about closing the digital divide often focus on steps that can be taken to protect data, develop digital skills, and improve broadband access. However, what Nigeria should also focus on is this relationship between the digital and the physical world. The country needs investment in physical infrastructure for its citizens to fully access the benefits of digital technology.
The ideal of digital inclusion, underpinned by the three key principles of access, adoption, and application, encompasses activities through which disadvantaged groups have access and use ICTs to enable them to fully participate in society and enjoy benefits and opportunities like other citizens. There is therefore a need for significant investment in infrastructure.
2. Financing Models for Technology Infrastructure Projects
As Nigeria’s demand for digital infrastructure grows, it is essential for sponsors and developers to understand the financing options and legal considerations that support successful project delivery. Models such as PPPs, project finance, crowdfunding, and blended finance offer viable pathways, particularly when aligned with regulatory requirements and ESG standards.
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Here are several financing models for technology infrastructure projects:
a. Grants
Grants are financial contributions provided by government or private institutions to support specific projects, typically without the expectation of repayment. They are a valuable funding option for technology infrastructure projects, especially in emerging markets.
Examples of such grants include the Bank of Industry (BoI) Grant and the Lagos State Science Research and Innovation Council (LASRIC) Grant. To access these funds, project sponsors and developers must meet the eligibility criteria established by each institution.
b. Public-Private Partnerships (PPPs)
Given the capital-intensive nature of infrastructure projects, Public-Private Partnerships (PPPs) offer a valuable opportunity for collaboration between the government and private sector. Federal-level PPPs are regulated by the Infrastructure Concession Regulatory Commission (ICRC) Act, while state-level projects are governed by respective state laws.
As certain technology services, like broadband provision, are increasingly viewed as essential public utilities, governments are more open to partnering with the private sector to deliver these projects.
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There are several PPP models, including Build-Operate-Transfer (BOT), Design-Build-Finance-Operate (DBFO), concessions, and joint ventures, which outline how projects will be delivered, who assumes the risks, and how returns are shared. These models are tailored to suit the specific needs and structure of each project, ensuring a flexible and effective approach to technology infrastructure development.
c. Project Finance
To manage project risks and facilitate external funding, developers often adopt the use of Special Purpose Vehicles (SPVs). These structures allow sponsors to access debt financing-typically from development finance institutions (DFIs), commercial banks, or international lenders-on a limited-recourse basis. This means that liabilities are largely kept off the sponsor’s balance sheet and vest in the SPV.
This financing approach uses long-term loans that align with the lifespan of the project, with repayments made directly from the income the project generates. For example, in data center projects, the developer can enter into long-term agreements with users, where the service fees are structured to cover loan repayments. This allows sponsors to deliver large-scale technology infrastructure without the need to fund the entire project upfront-apart from their equity contribution.
d. Crowdfunding
Crowdfunding is a popular financing method where funds can be raised from a large pool of contributors, typically through online platforms. It offers two main models: reward-based crowdfunding, where backers receive non-financial rewards or early access to products, and equity crowdfunding, where investors receive ownership shares in the entity.
Crowdfunding can be effective in technology infrastructure projects. Project sponsors and developers should however seek crowdfunding through duly registered and licensed intermediaries and platforms in accordance with the Securities and Exchange Commission (SEC) Rules on Crowdfunding.
e. Blended Finance and Development Funding
Blended finance combines public funds with private investment to reduce risks and make projects more appealing to investors. By using tools like grants, low-interest loans, and guarantees, it helps attract private capital for projects that might otherwise struggle to secure funding.
This approach is especially useful for large-scale technology infrastructure projects in Nigeria, such as broadband networks and establishment of data centers. To access blended finance, project developers need to present a solid business case, show clear social or economic benefits, and engage with development finance institutions (DFIs) like the African Development Bank, International Finance Corporation, and BoI early in the process. Developers must also demonstrate how the project will be financially sustainable and meet both commercial and developmental goals.
European Investment Bank - Nigeria Framework Loan to finance infrastructure projects in the country
3. Regulatory Landscape and Compliance Considerations
It is essential for sponsors and developers to understand the legal considerations that support successful project delivery.
a. Licensing Regimes
Depending on the nature and scope of the technology infrastructure project, developers may require specific licenses or authorizations from regulatory bodies before development of infrastructure projects. For instance, telecommunications and broadband service providers must obtain operating licenses under the Nigerian Communications Commission (NCC) licensing framework, which includes categories such as the Unified Access Service Licence, Internet Service Provider (ISP) Licence, and Infrastructure Company (InfraCo) Licence.
b. Sustainable Development and Regulatory Alignment
As investors increasingly prioritize environmental, social, and governance (ESG) standards when evaluating projects, developers and sponsors must ensure that their technology infrastructure projects meet these requirements. This is essential not only for attracting investment but also for demonstrating a commitment to sustainable and responsible development.
In line with these ESG expectations, technology projects involving physical infrastructure -such as towers, cables, and data centers-must comply with environmental and land use regulations. Developers are required to conduct an Environmental Impact Assessment (EIA) to evaluate potential environmental effects and outline necessary mitigation measures. Additionally, they must adhere to the provisions of the Land Use Act and local urban planning laws to ensure that the infrastructure is properly sited and aligned with responsible development practices.
c. Local Content and Technology Transfer
Developers must demonstrate compliance with local content laws that prioritize the use of local labour, materials, and expertise. Technology transfer, which encourages the sharing of knowledge and skills with local businesses, is also a key factor in ensuring project sustainability and fostering innovation. Both aspects are crucial for increasing a project’s appeal to financiers, especially public sector investors.
4. Major Ongoing Construction Projects in Nigeria
Both the GON government and private investors drive construction projects in Nigeria. The GON provides key infrastructure such as roads, bridges, dredged waterways and ports, and railways. These projects are pursued via government financing, public-private partnerships (PPPs), multilateral development banks (MDBs), and bilateral creditors.
Here are some major ongoing construction projects in Nigeria:
- Project: Eko Atlantic
- Location: Lagos, Nigeria
- Project Cost: At least $6 billion
- Project: Dredging of the River Niger/Onitsha/Baro in-Land Port
- Location: Niger, Delta, Kogi, Anambra, Imo, Bayelsa, Rivers and Edo
- Project Cost: Approximately $280 million
- Project: Lekki Free Trade Zone
- Location: Lagos, Nigeria
- Project Cost: $700 million
- Project: Abuja Millennium Tower
- Location: Abuja, Nigeria
- Project Cost: $333 million
- Project: Lagos deep seaport
- Cost: $1.5 billion
- Details: Commissioned in 2022, with a 16.5-meter water depth.
5. Road traffic
According to the CIA, the network of roads and highways has a total length of 195,000 km. If you take all the highways, country roads and main traffic arteries mapped on OpenStreetMap up to June 2025, you get a total road length of 1,434,252 kilometers. Highways and expressways alone account for 335,713 km of this. That is 6.16 meters for each of the country's 232.68 million inhabitants. This puts Nigeria in place 12 in the global ranking. However, the size and population density of the country of around 252 inhabitants per km² must also be taken into account. In total, there were only 13.50 million vehicles in Nigeria in 2021, i.e. around 0.06 per inhabitant.
With an average of 41,666 road deaths per year (2015 - 2019), road traffic in Nigeria is not considered particularly safe. This corresponds to around 21.1 fatalities per 100,000 inhabitants per year. By comparison, this figure is 16.8 worldwide.
In Nigeria, traffic on the roads is on the right, so you drive in the right lane and overtake on the left. Oncoming traffic comes towards you on the left-hand side. This regulation was introduced on April 1st, 1972.
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