Nigeria suffers from dearth of critical infrastructure needed to develop the economy. Between this year and 2018, it is estimated that an annual N4 trillion funding would be required to turn around the infrastructural deficit . However, despite the Transformation Agenda of the Goodluck Jonathan administration, fears are rife that actualising this feat will remain a mirage, given the consistent poor budgetary allocation to capital projects. Assistant Editor MUYIWA LUCAS writes.
As a trained welder and iron bender, Kehinde Ojo, an artisan in the Akute neighbourhood of Ifo Local Government Area of Ogun State, quietly plied his trade for several years, eking out a living. Since his business depends on electricity, and with the epileptic power supply in the country, he had to acquire a generator, with capacity just enough to power his tools. However, following the deregulation of Automotive Gas Oil (AGO), known in local parlance as diesel, he abandoned his vocation, realising that the cost of running and maintaining the generator had greatly eroded his profit margin. He has since taken to commercial motorcycling, popularly known as “okada”, shuttling between Akute and Berger.
“From riding okada, I am able to feed my family and discharge my responsibilities at home,” Ojo told The Nation. Yet, he has his concerns about his okada business. This has nothing to do with safety rather, it is in relation to the continued sustainability of the trade. He fears that on completion of the six-lane expressway on which work has begun along the Akute-Berger corridor, okada riding would automatically die, even without any law to prohibit such on the road. And when this happens, Ojo’s livelihood would disappear.
The plight of Musa Ibrahim, a trader in perishable food items, is more pathetic. He watched, helplessly, as his truck load of tomatoes, on its journey from the North, littered the Lagos-Ibadan expressway. Ibrahim recalled that the truck driver ran into a huge crater between the Sagamu and Lagos end of the dilapidated road, leading to the felling of the truck. As he sat by the roadside, beamoning his loss, and the poor state of the road.
Across the length and breadth of the country, dearth of critical infrastructure stares the citizens in the face. This is despite initiatives the Federal Government claims it has put in place to address the issue. From the poor power situation, to the poor state of roads, and poor railway system, there is nothing to write home about infrastructural development. In August last year, the Federal Government approved N124 billion for the reconstruction and rehabilitation of roads across the country. While government tries to be seen as taking bold steps to address these hydra-headed problems, yet it remains a long walk to fixing the same.
The Lagos-Ibadan expressway continues to attract attention. Not only is it the economic artery of the country, it is touted as the busiest road in the entire West Coast region. It was therefore a relief, when last year, the Federal Government awarded the 127.8 kilometre road to Julius Berger and Reynolds Construction Company, RCC, for mobilisation at a cost of N167.8 billion – amounting to over N1 billion per kilometer. This was after years of neglect of the road by successive administrations. While awarding the Lagos-Ibadan road contract last year, government had assured that over the 48-month duration for the job, its funding would be included in the annual budget. Only N5 billion was allocated to the rehabilitation of the Lagos–Sagamu section of the road in this year’s budget. The amount is a drop in the ocean going by the total sum of the project. Other monetary allocations for roads in the 2014 budget include N23 million for Lagos–Ibadan concession project management / consultancy services; N500 million for rehabilitation and asphalt overlay of Benin–Sagamu Expressway (Benin–Ofosu section); N750 million for the reconstruction of the outstanding section of Benin–Ore–Ajebandele–Sagamu Expressway Phase III; N78.15 million for the rehabilitation of Sagamu–Ajebandele–Ore Road section 1: Ajebandele–Ofosu Road in Ondo State.
The Lagos-Ibadan road is not the only road that is affected by inadequate funding. The 27.5 km Apapa-Oshodi Expressway, which serves the Apapa and Tin Can Island seaports in Lagos, is another road that has suffered same fate in the last four years. Despite the award of repair contracts to Julius Berger and Borini Prono in 2010, the work has been stalled due to unavailability of funds, forcing the contractors to abandon work regularly.
Obafemi Onashile, Vice President (West), African Association of Quantity Surveyors (AAQS), while presenting a paper at a Nigerian Institute of Quantity Surveyors (NIQS) workshop recently, disclosed that the country has fallen well behind international benchmarks in this area. With an estimated total road length of 193,200 kilometers (paved 65,000 km and unpaved 128,200 km) comprising 34,123 km Federal roads, 30,500 km State roads, and 129,577 km Local Government roads, Onashile said that the current cost of neglect of these roads implies a loss of network value of N80 billion per year and additional operating costs of N35 billion per year. He argued that this has affected public transport infrastructure in the country, as a result of the lack of investment and adequate maintenance for many years. Consequently, he noted, there has been a failure of planning to integrate different transport modes. For instance, there are currently no rail connections to the country’s seaports. The railway system now accounts for less than one per cent of land transport in the country. The neglect of the railway has led to over-dependence on road transport with 98 per cent of goods being transported by road. Indeed,the state of the roads is a reflection of the general infrastructural breakdown in the country, in spite of the several national development plans that have been launched in the country since independence, which have suffered poor implementation and execution.
In the area of educational infrastructure, the country is also be leaguered. According to the United Nations Educational Scientific and Cultural organisation, UNESCO, at least, 28 per cent of a country’s annual budget should go to the education sector in order to attain quality standard. But with a paltry N373.4 billion or 8.10 per cent of the current year’s budget allocated to the sector, it is no wonder why the sector has remained bastardised. Further assessment of the country’s education sector shows that a lot needs to be done if the country would be ranked among the top 20 economies by 2020. As at 2011, there were 117 universities in Nigeria (36 federal, 36 states and 45 private). Since 2010, not less than 1.2 million candidates seek admission into various universities in the country with placement given to only 200,000 candidates. This suggests that the universities in the county are insufficient to meet admission demands. The outlook for primary and secondary education is also not encouraging. These are reflections of the poor state of education infrastructure in the country. The National Bureau of Statistics (NBS) general households survey shows that in 2007, 10.4 per cent of Nigerians had access to pipe borne water; 26.8 per cent from bore hole; 33.3 per cent from well; 24.4 per cent from streams/ponds and 4.1 per cent from trucks/van, i.e. water vendors. This suggests that water and sanitation infrastructure in the country is grossly inadequate.
Still, in the area of health, it remains very disheartening that the country has continued to slide. Trends in Maternal Mortality: 1990 to 2010, a United Nations report released in 2012, says that Nigeria accounts for 14 per cent of the World’s maternal mortality, with 630 deaths for every 100,000 births. Underscoring the inadequacy of health facilities in the country, Onashie’s submission is that there were only three hospital beds for every 10,000 people, and only 45.9 per cent had access to medical facilities in the country in 2006. Also, the Save the Children Organisation, an international non-profit group, disclosed that almost 800,000 Nigerian children die every year before their fifth year; another record that makes the country the highest in infant mortality on the Continent. So bad is the local healthcare system that medical experts say no fewer than 5, 000 Nigerians travel to India annually for medical care. As at September 2013, Dr. Osahon Enabulele, National President, Nigerian Medical Association (NMA) put the country’s loss to medical tourism at about $800 million or N129 billion annually. This amount of money spent by Nigerians who now go abroad almost on daily basis for medicals, is more than enough to build more than five state-of-the-art, fully equipped hospitals across the country. Such spending, experts say, also constitute a strain on the economy, especially its foreign exchange.
Murtala Aliyu, President, NIQS, revealed at the institute’s recent workshop themed: “Towards a Sustained Growth of Emerging Economies in Africa: The Infrastructure Imperatives” that the country recently had a National Integrated Infrastructure Master Plan (NIIMP) which highlighted a gap of almost $3 trillion, or N468 trillion (at N156 per dollar). Last August, Shamsudeen Usman, former minister of national planning, speaking at the Securities and Exchange Commission, SEC, Infrastructure Round Table, dropped the bombshell, revealing that N464 trillion is required for infrastructural development in the country over the next 30 years. This translates to N20.3 trillion in the next five years, and an average of N4 trillion per annum from 2014 to 2018. Equally, Oby Ezekwesili, former minister of education and former World Bank vice president (Africa), in 2013, sounded a note of warning on the dangers of the poor state of infrastructure in the country, even as she disclosed that over the next 10 years, a sustained annual spending of about $14.2 billion is required to provide new infrastructure and rehabilitate the already dilapidated and decrepit ones.
Ezekwesili argued that without adequate provision for infrastructure, and with the continued dearth of essential infrastructure in the country, the cost of doing business will definitely remain very high. “Indirect costs borne by firms to fill infrastructure gap in Nigeria amount to 15 per cent, whereas in China, it is five per cent; India 10 per cent and in Turkey which ranks 19th in the rating for major economies in the world, it is two per cent,” she explained. Little wonder stakeholders refer to infrastructure as the life blood of any economy considering that no economy can grow and develop without a reasonable stock of critical infrastructure. Therefore, this presupposes that where infrastructure is inadequate or lacking, growth is affected and people’s standard of living is negatively impacted.
Admitting as poor state of infrastructure in the country, Mike Onolemene, Minister of Works, said: “The infrastructure deficit is large and affects every sector. Investment in the road sector alone requires at least construction of 14,000 kilometres of new roads annually for the next seven years, apart from maintaining and rehabilitating the existing network as a matter of routine, which will require the average annual expenditure on roads to increase seven fold to nearly N750 billion.” He told a conference on Funding Infrastructure Development in Africa: Nigeria As a Case Study, in Abuja, in September 2013 that investment in physical infrastructure, such as roads, houses, power and water is essential for the growth of the economy.
But, with successive governments failure to reinvest in the existing infrastructure, nor-providing new ones, many stakeholders have not relented in lending a voice to the implications of the dearth of infrastructure for the country’s development. Mr. Paul Miyonmide Gbededo, Chief Executive Officer and Group Managing Director, Flour Mills of Nigeria Plc, in a recent interview with The Nation, contends that there is need to improve and maintain basic amenities and infrastructure, particularly the road network, to aid distribution and delivery of raw materials and finished products. This, he reckons, is key to enable the country achieve industrial revolution. Gbededo explains, developing the power sector and general infrastructure is key.
“We must be able to fix our power sector and the transportation sector as a whole. Our infrastructure level must be dynamic and functional to move goods around and help people create wealth. That is very important,” he submitted.
The Federal Government may have considered several programmes to improve the infrastructural base of the country. Some of these were included in initiatives like the Vision 20 ; 2020, a development plan set by the Federal Government in 2009, which aims to make Nigeria one of the top 20 industrial nations by the year 2020. It was anchored on a projection of Gross Domestic Products (GDP) of $900 billion and National per capita income of $4,000 per year by the year 2020. The critical infrastructure target in the plan was for Nigeria to achieve 60,000 Megawatts (MW) of electricity, apart from the other series of reforms planned to be effected before 2020, such as decentralisation of governance, electoral reforms, land use/property reforms, public services reforms etc. The Millennium Development Goals (MDGs), is also part of the plan. It is an international development plan initiated by the United Nations (UN), following the popular Millennium summit of the UN in the year 2000. All 189 UN member states (including Nigeria) subscribed to help achieve the Millennium Development goals by 2015. The goals include the eradication of extreme poverty and hunger; achievement of universal primary education; promotion of gender equality and empowering women; reduction of child mortality rate; improvement in maternal health; to combat HIV/AIDS, malaria and other diseases; to ensure environmental sustainability, and to develop a global partnership for development.
Still, government’s NIIMP,a 30-year development plan set in 2013, (i.e. NIIMP 2013-2014) to cost about $2.9 trillion (¦ 464 Trillion) and to be funded by the federal and state governments as well as the private sector, is another effort. The plan will be implemented through 5-year operational plans and 10-year strategic plans for the 30 years. Its objective is to harmonise the infrastructure development amongst the different sectors and states for more effective management. It reckoned that an average of $25b (¦ 4 Trillion) investment is required yearly over the next five years (2014-2018) compared to the current $9.0b (¦ 1.44 Trillion). These investments need to be done by the governments either directly or through private sector arrangements.
Laudable as this seems, from all indications, infrastructural deficit in the country may not be a thing of the past any time soon. This is because the Federal Government’s allocations to infrastructure in its annual budget is a far cry from the required amount to meet the need. For instance, in the 2014 budget, the total allocation for capital projects stands at 27 per cent, representing N1.1 trillion of the N4.6 trillion proposal. This is a sharp contrast from the position of the Minister of Finance, Dr. Ngozi Okonjo-Iweala’s promise of increasing allocation to capital expenditure on her assumption of office three years ago. In the 2013 fiscal year, allocation to capital expenditure was 31.34 per cent, and 28.53 per cent in the 2012 budget. Experts maintain that such meagre allocation to capital projects, under which lies infrastructure, year-in-year-out, is an indication of the unseriousness on the part of the federal government to develop the economy and a huge minus for the Transformation Agenda of the President Goodluck Jonathan’s administration because such paltry allocations cannot drive any development in an economy. It is the belief of experts of developmental economics that except the situation is reversed, socio-economic development will continue to elude the country. They pointed out that a country like China, which spent 15 per cent of its gross domestic product (GDP) on infrastructure at the turn of the millennium, had its economy lifted massively.
Onolemenmen, agrees that government alone cannot fund this huge portfolio due to the limited financial resources available and against the backdrop of current global financial tightening and increased competition for available infrastructure funds. To this end, government, he disclosed, is exploring new ways of bridging the infrastructure funding gap, by way of partnering the public-private. Aliyu also agrees that what is required is a huge sum that cannot be borne by government alone, but requiring the partnership of the organised private and other development bodies to be involved, including the National Assembly, which should play a key role in enacting the enabling legislations that are investor friendly.
But this option may remain elusive given government’s penchant for disregard agreements with investors and its policy summersault. With poor budgetary allocations for critical infrastructure and the seeming lack of political will on the part of government to overcome the challenges, many Nigerians are concerned that the much needed infrastructural transformation of the country may remain elusive for many years to come. Besides, stakeholders maintain that the biggest problem to the development of infrastructure in Nigeria is the problem of corruption, a cankerworm that has kept the country on its toes.
