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5 Several financing options can be used to support the investments Financing Financing options available 2014-18 USD billions, 2010 constant prices Govern- ment budgets Public debt Other sources 13 36 29 29 PPPs 10-20 Assumptions Projections from the Nigeria Federal Budget Office MTFF1 Debt levels increasing to 25% of GDP SWF2 (~8 bn): Excess crude account available; 32.5% to infrastructure Pension fund (~5 bn): Growth at GDP growth rate; 20% to infrastructure Based on examples of other developing countries Challenges Great dependence on oil revenues and thus exposed to oil prices volatility Raising large amounts of debt potentially challenging Requires regular debt servicing Unlikely to provide significant funds in the first few years Potentially risky and politically controversial Complex and potentially back- firing if not properly managed Private and public sector interests not always aligned ■ Cost potentially higher than through government debt ☐ L Total financing available of up to USD 88-98 billion for the next 5 years Usage of diverse mix of finance options advisable to minimize exposure to each option specific risks Priority should go to non-debt options (parti- cularly budget, SWF and PPPs) so as to prevent public debt hikes 1 Medium Term fiscal framework; 2 Sovereign Wealth Fund SOURCE: NIP; Budget Office of Nigeria; Debt Management Office of Nigeria 33

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