Nigeria’s transport infrastructure has over the years been menaced by bad roads with the attendant threat and danger. The federal government has continued to attempt to address the issue, but all to no avail, at least not as sufficiently desired.
The nation’s road network is characterised by unnecessary delayed construction, poor quality and inadequate funding, as evident by the current poor and dilapidated state of roads across the country. A lot factors like corruption, poor planning, lack of funds and mismanagement have, arguably, been responsible for the situation we are currently in.
The minister of Works and Housing, Mr. Babatunde Fashola, recently announced that the federal government would require a total of N1.5trillion to address the road infrastructure gap across the nation in the next three years. At least N500billion is needed annually to develop 35,000 kilometres network of roads. We are told work is currently ongoing on only 13, 000 kilometres of the nation’s federal roads. But one thing that has not been clearly addressed is how the government intends to raise the fund. And because of issues like this, what we have witnessed in this country is a situation where a particular road construction drags on for years; a portion of the road is constructed in the process, and by the time work commences on the other portion, the earlier one would have dilapidated or worn off.
In order to adequately address the menace of bad roads and delayed road projects, it is high time we involved the private sector. It is now obvious that government alone cannot solve the problem. This is why, as a newspaper, we call on the federal government to begin full implementation of the Executive Order 007 which was signed by President Muhammadu Buhari in January 2019. The Executive Order 007 is aimed at allowing the private sector fund the construction of roads and be repaid via tax credits to be utilised against their future tax obligations. The Order is known as the “Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme.”
Importantly, the Order allows the federal government of Nigeria to leverage funding for private companies to construct and refurbish eligible road infrastructure projects. Focus is placed on the development of efficient and effective eligible road infrastructure projects that create value for money. These projects must guarantee participants in the scheme a timely and full recovery of any funds provided.
It is supposed to allow the private sector to use their capital, their know-how and also their efficiency in terms of delivering roads in time and the government will be saving billions of naira. Public-private partnership(PPP) is one way for government to partner with the private sector to share the risks and rewards of providing public infrastructure.
However, there are some challenges that could undermine the PPP agreement, which include lack of legal framework, inconsistent government policies and failure to honour agreements validly entered into, among others. Again, another challenge is, in implementing the Executive Order 7 of 2019, the federal government will have to sequester funds to road infrastructure ‘without appropriation by legislature or application of other revenue allocation rules.’
The bad state of the nation’s roads has led to considerations of appropriate road construction material and best models for road financing. A kilometre of asphalt road in Nigeria is estimated to cost N1billion, or about four times the average cost of a kilometre of an asphalt road on the African continent. In fact, the most reasonable road solutions to Nigeria’s situation have remained balls in the air, as the government has had its hands full; doing too many things at a time with not-too-satisfactory results.
The situation was not this bad in the past when the nation had toll plazas which revenues were used to fix and repair the roads. But lack of transparency forced the federal government under Chief Olusegun Obasanjo to bring down toll gates across the country in 2003, in order to wipe out the corruption involved in the toll gate revenues. But it has turned out to be cutting ones nose to spite ones face.
Globally, roads are increasingly being funded under a private-public partnership (PPP) arrangement. In the new world of road construction, roads are built for durability, in other words, they are meant to last. The implication is that road contracts tend to run from two to five years. The longer the construction period the higher the outlay cost and the more indeterminate the project cash. Let the private sector build the roads, even if they have to toll them at the end of the day.