• Saturday, February 24, 2024
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BusinessDay

Logistics business bleeds as poor road infrastructure hurts cashflow

Abia restricts movement of heavy-duty vehicles within Aba and Umuahia between 7am to 8pm

Despite yearly budgetary allocation with huge figures for ministry of works, road infrastructure in Nigeria remains in deplorable condition, impacting negatively on businesses and the economy. Across the country, it is tales of woe by road users.

For logistics business, it is almost a death knell as that sector which facilitates trade and oils economic progress is bleeding over delays on collapsed federal highways with significant impact on their cashflow.

Until recently, when a little palliative was done, Benin Bypass in Edo State was a nightmare for all categories of motorists, but particularly for haulage and logistics companies whose trucks were stuck for days and weeks in the ditches and craters that dotted that stretch of the highway.

The Benin Bypass is not an isolated case as many federal roads in many parts of the country are in worse conditions, including Enugu-Onitsha federal highway, East-West road, Enugu-9th Mile-Nsukka-Otukpo federal highway, among many others.

Recently, the general manager (GM), Fleet Business Optimisation, at AG Leventis, narrated the frustrating experiences of their drivers on roads, citing an instance of one on Enugu-Nsukka road whose video has been trending online in the past couple of weeks.

The company, according to the GM, operates 1,140 trucks, moving products for Coca Cola, Heineken, TGI Click, owners of Chi Vita, Frigoglass (Beta Glas), adding that they had worked with PZ Cussons and Big Cola in the past.

“Working with these multinationals as partners gives us an insight into their pains as well because their survival depends on us and vice versa,” the GM said with reference to the video made by one of their drivers who, he said, had become accustomed to spending several days on federal highways.

Read also:Nigeria’s logistics sector seeks tech, policies, infrastructure overhaul

The GM noted that these delays impacted their cash-flow to pay back interests on bank loans, increase maintenance costs with spare parts and tyres imported on a volatile foreign exchange. He lamented that, in the face of all these, government does not chart clear strategy to support businesses.

“When all costs such as these are loaded on the final consumer, how many of them can purchase it? We see report of doctored inflation as 27.44 percent while warehouses are filled with products unsold to the mass market of 220 million because the team at the top is reckless,” the GM said.

Commenting on this, Femi Oludayo, a civil engineer, told BusinessDay on phone at the weekend that the GM’s story was just one out of several others like that.

“What do you expect in a country where 34,000 kilometres of the country’s 200,000 kilometres of roads belong to the federal government and the condition of these federal roads is so poor that only about 35 percent of the network is motorable,” he queried.

In eight whole years, “the federal government constructed 8, 352.94 kilometres of roads, created about 339,955 jobs, and spent close to N11 trillion on road infrastructure,” he lamented, quoting Babatunde Fashola, the immediate past minister of works and housing.

Oludayo noted that federal and indeed other roads are not well maintained and construction of new ones take almost forever because, according to him, Nigeria has the most expensive roads maintenance and construction cost per kilometer in Africa.

“The cost of either constructing or maintaining a kilometer of road in Nigeria is extremely high when compared to other African countries which partly explains the dire situation of roads in the country’,” he said.

Though Adedamola Kuti, Director, federal highways at the ministry of works, told BusinessDay on phone that it was difficult to determine the cost of road construction or maintenance per kilometer, a report by an Abuja-based Centre for Social Justice (CSJ) offers a little insight.

The report which was based on an earlier study conducted by the World Bank puts the cost of constructing a kilometer of road at between N400 million and N1 billion. This contrasts with what obtains in South Africa where maintaining a kilometer of road costs an equivalent of N7.6 million