Spotlight on Project BRIDGE: The $1.2bn question around Nigeria’s path to digitisation

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Read History Go to My Account Log Out Enhanced by Google Opinion Spotlight on Project BRIDGE: The $1.2bn question around Nigeria’s path to digitisation Development finance and other multilateral institutions, including the World Bank (500m), AfDB(200m), EBRD ($100m) and the European Union (€22m), have

Listen to this article Share Development finance and other multilateral institutions, including the World Bank (500m), AfDB(200m), EBRD ($100m) and the European Union (€22m), have committed over 40% of the funding requirement for Nigeria’s 90,000km fibre-optic cable rollout plan (Project BRIDGE) – taking nationwide coverage to c. 125,000km once completed. The next step is private capital mobilisation through Quest Merchant Bank – advisor to the Federal Ministry of Communications, Innovation and Digital Economy. Nigeria’s digital future now hinges less on ambition than on the ability to raise requisite financing. The gap on this $2bn mission-critical project currently stands at $1.2bn, and closing this will likely turn on the Federal Government’s willingness to absorb risks investors cannot price, e.g., weak demand/utilisation, adverse currency fluctuations and project delays (right-of-way approvals).

In 2001, GSM spectrum was auctioned to private operators in what was widely regarded as one of the most successful and transparent regulatory events in African history. As a result, Nigeria leapfrogged landline usage in what was ultimately a paradigm-shifting event for per capita productivity across the country. Here the returns were clear, and, therefore, the opportunity was funded overwhelmingly with private capital. The next leap – to cloud and AI – runs on fibre, and the returns are less transparent.

BRIDGE stands for Building Resilient Digital Infrastructure for Growth and is the Federal Government’s plan to lay 90,000 km of new fibre-optic cable, taking Nigeria’s fibre backbone from 35,000 km today to 125,000 km and reaching all 36 states. The plan was approved by the Federal Executive Council in 2024. BRIDGE is an open-access wholesale model whereby the single company will build, own and operate the network – selling capacity to telcos, ISPs and data centre providers. As a public-private partnership, the government seeks to own 25%-49%, while private investors hold the remainder (with operational control). The aim is ultimately to increase Nigerian broadband users from 92m to 150m by 2030 while facilitating a 17% reduction in wholesale broadband prices and connections for c. 60,000 public institutions (schools, hospitals, and police stations).

Scalable cloud, AI and even the CBN’s recent data localisation policy initiative rest on cheap, reliable backbone capacity – hence the mission-critical tag earlier. Broadband penetration has risen steadily in Nigeria (of course predominantly in urban areas), standing at 57% as of July 2026. Internet traffic is up c. 47% yoy, and ICT is the second-largest contributor to real GDP as of Q2 2026. The demand is there. This is the route through which a large share of Nigeria’s underemployed but capable workforce can move out of poverty and into the earning, spending middle, with real pathways to income, education and innovation.

So where do things stand? Quest Merchant Bank is the transaction advisor and invited interested parties to pre-qualify in April 2026 (two years after the programme was approved by the executive council). Bridge OA – the operating entity – was incorporated in August 2026. The federal government’s equity stake is funded partly with sovereign loans from development institutions. No ‘private’ capital has yet been confirmed. As of September 2026, officials said a significant private offer was being concluded, but no terms have been published – the official project timeline from the Ministry is for September 2030.

Now, having sat on the investor side of the table – both institutional and ‘in-house’ for a project feasibility perspective – there are a couple of key points to address in making the decision to participate. First, demand risk. Who are the off-takers here? Major telcos and ISPs already have their own fibre footprint, so what makes them willing buyers? Focus on routes not already covered is key. Take-or-pay agreements materially derisk this programme for both those with existing routes and those looking to tap into this infrastructure and establish their own broadband service goals. The federal government also has an important role to play on the demand side as an anchor tenant for the c. 60,000 public institutions it plans to connect.

There is also the currency risk. A significant amount of CAPEX for BRIDGE will be priced in USD (cables and other equipment). If the naira devalues, the returns profile diminishes significantly against funds already deployed in dollars. Now, the straightforward indexing of tariffs to the dollar would defeat the point of cheaper broadband. Better tools exist, such as extending concession terms in a devaluation scenario and refinancing dollar debt into naira once the network is operating. There will also likely be some USD revenue coming from subsea cable backhaul and international bandwidth customers, which would serve to offset some of this risk. Tax incentives could also form a part of the mitigation package to assuage investor concerns around long-term capital deployment and associated currency risk.

Finally, project delay risk relating to state-level hurdles. 13 states have so far waived right-of-way (RoW) charges, with 16 having adopted the N145 per metre rate recommended by the National Economic Council. There is, of course, still exposure from the remaining seven states that have not complied. Signed RoW agreements would need to be a condition precedent to private capital commitments. There has also been a proposal from the APC chairman (in October 2026) that all federal and state road contracts include telecom ducts – thereby lowering future build costs and shortening delivery timelines.

Worth noting the proposed $1bn Microsoft/G42 data centre in Kenya stalled largely because requests for government-backed payment guarantees were turned down. Nigeria will face the same requests, and deciding how to manoeuvre around this will be key to progressing.

The prize for getting financing right is increased fibre coverage, ultimately supercharging productivity. Coupling this with training and skill development for the cloud computing and AI age will help leverage the abundance of human capital we have at our disposal over time. This was witnessed in India following its 1991 reforms, seeing software exports grow from c. $700m in 1995 to c. $4bn by 2000. Indian engineers became a trusted global supplier, and software services exports reached $205bn in 2024-2025. One thing India pursued fervently was the establishment of technology parks, which gave exporters the high-speed links not readily available on the rest of the network – the same fibre + talent formula is applicable in Nigeria. 3MTT (the ‘3 million Technical Talent’ government programme designed to train 3 million technical specialists and help create 2 million digital jobs) has trained about 135k–160k people, with 1.87m in the pipeline. Andela, Decagon and Semicolon already place engineers remotely and (excluding Andela) have strong pipelines of would-be engineers ready to be trained. Like India, Nigeria has an English-speaking workforce. Unlike India, we conveniently share the European working day (similar time zones). Enhanced broadband coverage and penetration are what turn those advantages into exports.

The ultimate project owner here is our Minister of Communications, Innovation and Digital Economy, and he – I’m sure – will be focused on two measures: date of financial close (private capital) and kilometres laid each quarter to reach the September 2030 target. A public quarterly scorecard is an important part of keeping accountability and transparency toward this all-too-important endgame. In 2001, private capital paid for the leap because returns were plain. This time the government’s job is to make returns visible by assuming risks investors will struggle to price (favourably).

Samuel Adeleke Adelaja is a director at AR Capital.