Tag: infrastructure gap

A commonly used metaphor of war is that a general is as good as his lieutenants. It is the lieutenants doing the field battles that make the general who worked out the war plan look good or bad.

For President Muhammadu Buhari, this saying applies in more ways than one.

By his own confession, he was virtually overwhelmed by the disarray in which the country whose government he took over was. It took him a while to pick the team with which to tackle what he found on the ground. The performance of these lieutenants would provide the assessment Buhari would get at the end of his tenor.

That Nigerians returned him for another term of presidency means that to a large extent, the electorate endorsed the work he did with his team over four years. Within this general endorsement, there were areas of high performance and naturally, areas of not-so-high performance.

One such area of high performance is the provision of physical infrastructure. When President Buhari lumped together the erstwhile ministries of Power, Works and Housing which constitute some 80% of basic infrastructure into one ministry with one minister and three ministers of state, there was some murmuring as to how one man could oversee such.

But as many Nigerians would soon find out, it is all about effective delegation, which in turn depends on the quality of the delegate. If one president could oversee the affairs of the entire country through some two dozen ministerial departments, then so could an effective captain oversee three or more related ministries. Nigeria had such in Babatunde Raji Fashola, SAN.

Fashola’s top-of-the-class performance as governor of Lagos State in the preceding eight years commended him to that position, and he discharged creditably for his principal, the president.

Fashola demonstrably understood the vision, and was able to give it expansive interpretation. He needed no hand-holding and ran with it from the moment he was sworn in.

He had sufficient mental elevation to give him the bird’s eye-view to see the nexus connecting the three units of his ministry as the basic infrastructure upon which the economy rests.

He understood that the roads are at present the main artery through which all economic activities are routed; that power is the livewire of industrial activities; and that housing is the second-ranked human need after food.

The classification of Nigeria as a developing nation would ordinarily mean that the nation is work-in-progress in terms of physical development which at the first level would be about primary infrastructure and then secondary infrastructure. What Fashola met on the ground must have stunned him. It turned out that the nation was a classic case of arrested development in the hands of those whose duty it had been to develop it.

Fashola found out that the Federal Ministry of Works which superintends road construction and maintenance had a paltry budget of N18.132billion in 2015 and actually got the sum of N13 billion for the fiscal year. Yet, this is a ministry saddled with the execution of 206 road contracts measuring over 6,000km across the nation, with a contract value in excess of N2trillion!

Indeed, Fashola found out that the nation ceased paying proper attention to physical development as it relates to roads as far back as 2002. That was the last time the Ministry of Works got a meaningful budget in excess of N200bn for a fiscal year! The disconnect had been very long.

In the power sector, the budgetary gap was there, but not in the same magnitude. The Federal Government had in 2013 finally implemented the Electricity Power Sector Reform Act of 2005 – some eight years late. The main kernel of the Act was the privatization of the nation’s power assets. These assets that were hitherto managed for the government by the Power Holding Company of Nigeria (PHCN) were classified into two – the power generating companies (Gencos) and the power distribution companies (Discos). They were sold to the private sector, with the government retaining some equity interests.

But the nation’s generated power, at a maximum output of 4,000mw, was awfully below demand, leading to power rationing which had defined the nation for decades. In response, the government had embarked on the development of generation assets, which it proposed for future sale. These are mostly under the Niger Delta Power Holding Company (NDPHC).

Then, the government retained the transmission side of the power business which is a critical part given that over 30% of generated power was lost in the transmission process. The government entered a contract with a Canadian company, Manitoba, to manage the transmission process.

Total federal government budget for the power ministry in 2015, amounted to N9.606 billion, out of which N4.476bn was for recurrent expenditure, covering salaries and overheads, leaving just N5.130 billion for capital expenditure. That was gross under-provisioning which couldn’t provide sufficient cover for 22 out of the 142 transmission projects it had at hand, valued at N40 billion.

From the very first budget of this regime, seriousness came into the nation’s infrastructural development. From a budget of N93.66 billion for the ministries of Works, Power, Transport, Aviation and FCT in 2015, the budget spiked to N433.4 billion in 2016 for just Works, Power and Housing.

By fiscal 2018, the government had spent some N2.7 trillion on infrastructure. And the results kicked in, expectedly. In fiscal 2017, for instance, 766km of roads were constructed or rehabilitated across the nation. They were mainly strategic arteries with huge socio-economic benefits connecting states and regions.

For the power sector, generation has hit an unprecedented high of 7,000mw, up from 4,000mw that the government met on inception. It is in the process of sorting out the vexatious estimated power usage issue in a manner that favours both the distribution companies and the consuming public. This is coming with the introduction of the Meter Asset Provider programme.

On the housing front, Fashola undertook a pilot of his National Housing Programme across 34 states that had provided land. More importantly, he has created a better environment for private sector participation in housing. He slashed equity requirements for those seeking mortgage loans from federal agencies. For those seeking N5m and under, the equity contribution was slashed from 5% to zero, while those seeking over N5m will now contribute 10%, down from 15%.

Overall, the idea of bundling these basic infrastructure ministries has worked for this administration. They now constitute a critical mass that the government focuses on to drive development. But it would have been a colossal failure if it had not been placed under a capable hand that could expansively interpret and run with the vision. More of the same will do the nation a lot of good.

The one-day conference on fast tracking port reforms, organised by The Nation, in conjunction with the Federal Ministry of Transportation, and Epsilom Ltd, last Thursday in Lagos, exposed the huge infrastructure gap in our country. A goggle search showed that Nigeria will need about USD 2.5 trillion to bridge her infrastructure deficit, in the next three decades according to the Institute of Appraisers and Cost Engineers. At N300 per dollar, that deficit is about N750 trillion.

With a federal budget of N6.1 trillion in 2016 in addition to about N6.1 trillion being cumulative states’ budget for the same period, making a total of about N12.2 trillion, Nigeria will wait for many decades to overcome its infrastructure deficit, if it relies on its earnings. And that will only happen, if those exercising public power consistently and judiciously apply all the budgeted resources towards bridging the infrastructure gap, which is practically impossible.

Considering that within the two major tiers of government, averagely less than 30 percent of the budgets are earmarked for infrastructure development, Nigerians may have to wait for a century, or more, if they rely solely on their own resources, to bridge the infrastructure gap. This will be so, even with reasonable improvement in income generation as the year progresses. So, the only way out, as pointed out at the conference, is through Public Private Partnership (PPP).

But like in the management of our local resources, corruption also poses a huge challenge to PPP, whether for ports’ infrastructure or other infrastructure deficits. For instance, if the Senate’s indictment of the Secretary to the Government of the Federation, Babachir Lawal, is sustainable, then over N500 million that could have been better used, was cornered for a senseless so-called ‘grass cutting’ contract. Again, if N34 billion was wasted by the Jonathan government on the dredging of River Niger as alleged by the Minister of Transportation, Chibuike Rotimi Amaechi, then the infrastructure gap, may take eternity to overcome.

In addition to the challenge posed by corruption, the Nigeria-British Chamber of Commerce listed other debilitating factors that need to be addressed to attract the needed capital to bridge the nation’s infrastructure gap.  They include policy instability, poor legal and political framework, holistic view of national planning, coordination between government agencies, efficiency in the civil service and other government agencies, among other factors.

While the need for infrastructure development across the country is very urgent, that of the ports is even more urgent considering the huge potentials in income generation from there. One of the significant proposals at The Nation’s port reform conference was the need to decongest the Lagos ports, by extending infrastructure development to other ports in Calabar and Port Harcourt. In his key note address, at the opening session, the Honourable Minister of Transportation, Rt. Hon. Chibuike Rotimi Amechi delved into the economic and socio-political challenges facing the country.

Sagacious and with penetrating insights in politics and the economy, the minister took the audience through the humongous challenges facing the transportation sector and efforts being made by the key agencies of the ministry, towards making Nigerian seaports world class. He said the federal government has made huge investments to secure the nation’s maritime corridor and emphasized that President Muhammed Buhari’s government was more interested in action, than showmanship.

After the opening session, the first plenary was on strategies for a speedy implementation of the integrity plan resulting from the ports sector corruption risk assessment; while the second was on practical ideas for better stakeholder collaboration in fast-tracking the reduction of cargo dwell time to 24 hours and minimizing revenue leakages. At the first plenary, the Independent Corrupt Practices and Other Related Offences Commission, represented by Mrs Okoduwa, made a presentation on corruption risk assessment in the ports sector in Nigeria: strategies for speedy implementation of the integrity plan.

The third plenary which this writer chaired, dwelt on financing the massive infrastructure upgrade needed within the ports and for achieving a swifter evacuation of cleared cargo. Presentation at the third session were made by the Managing Director/CEO of Nigeria Railways Corporation, Engineer Fidet Okhiria, the General Manager, Business Development and Joint Venture, Nigeria Ports Authority, Engineer T.O. S. Talabi, and the representative of National Inland Waterways Authority,  Danladi Ibrahim.

The railway helmsman took the audience through the massive plans to upgrade the railway infrastructure across the country, and link the various ports. He argued that efficiency in moving goods out of the ports, and across the country is critical to reducing the costs paid by the consumers, for products. Of course, the costs of food prices will reduce, if the railways are revamped and agricultural products can be moved through the railways.

Engineer Okhiria, mentioned that the two ports in Lagos, will be connected to the standard gauge that will run from Lagos to Ibadan, now under construction. There are also plans to develop standard gauge from Lagos to Port Harcourt, and another from Port Harcourt to Maiduguri. He praised the collaboration with the Chinese government, which has resulted in USD2 billion funding, with the Chinese providing 85% and Nigeria 15%. Despite the collaboration with the Chinese, Engineer Okhiria noted the hug funding gap, begging for investors.

In his presentation Engineer Talabi dwelt on how to fund the needed efficiency in our ports. To do that, the key he noted, is automation, which will solve the delays and also curb corruption. He reeled out plans to infuse more automation and efficiency in the industry, through reforms, concession and public private partnership. Commentators noted that despite the concessions made by the government, the much needed efficiency is still lacking. The answer Talabi noted is more automation, to reduce human interface, susceptible to corrupt practices.

While working towards internal efficiency, he argued for inter-agency collaboration to enhance external efficiency particularly around the ports. He raised the problem of tanker drivers, and the urgent need for rail lines and good roads to connect the ports. A contributor to the discuss noted that more than half the tankers and trailers driven around the Apapa and Tin Can ports, and the ancillary tank farms, daily, have no immediate business to do; but are merely hoping to gain one opportunity or another. This writer noted the losses in man hour and the health hazard that owning business or living within that axis, poses.

Danladi Ibrahim of the Nigeria Inland Waterways Agency, made interesting presentations on the need to also make our inland waterways, world class. He noted the huge economic prospects that would come from dredging the River Niger as swift evacuation of goods to the hinterland can better be done through the inland waterways. He canvassed for the development of port infrastructure along the River Niger, so that smaller vessels could deliver direct to the hinterland and save our roads.