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Nigeria's leading finance and market intelligence news report.

Roads infrastructure and funding challenge in Nigeria

Nigeria has approximately 200,000 kilometres of roads. Of this number, 34,000 kilometres belong to the federal government and these are the class of roads called federal highways in the country.

The condition of these roads is so poor that only about 35 percent of the network is motorable. A trip through many of these highways, especially those in the southern part of the country, confirms to any traveller that the roads are merely highways to hell.

It is pertinent to point out that there are efforts at addressing the country’s N3 trillion out of $15 trillion global infrastructure gap. Besides budgetary allocations, there have been interventions from direct foreign investment (DFI). The infrastructure tax credit initiative is another of such interventions.

The Sukuk funding for road construction which recorded 132.25 percent over-subscription in 2019 is yet another intervention. The second tranche of the ₦100 billion of the fund was meant to fund 28 road projects across the country.

This included the dualisation of the Lokoja-Abuja-Benin; Abaji-Lokoja; Kano-Maiduguri; Oyo-Ogbomosho and Benin-Shagamu roads and the rehabilitation of the Enugu-Onitsha and Enugu-Port Harcourt roads.

Despite these efforts, the roads remain death traps and highways to hell. And the reasons are not far-fetched. It is no secret that the cost of either constructing or maintaining a kilometre of road in Nigeria is extremely high when compared to other African countries.

A report by the Centre for Social Justice (CSJ) based on an earlier study by the World Bank estimates the cost of constructing a kilometre of road at between N400 million and N1 billion.

The budgetary allocation for the Federal Ministry of Works and Housing in the 2020 budget, for instance, was N262 billion. In 2019 fiscal year, the ministry of Power, Works and Housing had budget allocation of N428.4 billion. This is higher than the N127 billion for Power and the N262 billion for works and housing in 2020 put together by about N39 billion.

Placing these numbers side by side with the 200,000 kilometres of roads in the country makes roads infrastructure funding in the country a huge joke, meaning that poor funding and lack of commitment to the maintenance of existing ones are reasons for the poor condition of highways in Nigeria.

To understand how poor funding and high cost of road construction impacts on roads infrastructure in Nigeria, there is need for a comparative analysis of two highways that have similar history.

We recall that, in 2013, the Federal Government awarded contract for the reconstruction of the 127- kilometre Lagos-Ibadan Expressway at N167 billion, which was equivalent to $1 billion at the time in terms of naira exchange rate to the dollar.

In the same year, a similar contract was awarded for the 1,028-kilometre Lagos-Abidjan road project. The Economic Community of West African Countries (ECOWAS) which awarded the contract estimated this project to cost between N167 billion and N240 billion.

The six-lane ECOWAS project is expected to connect five major cities in the region namely Lagos, Nigeria; Cotonou, Benin Republic; Lome, Togo; Accra, Ghana and Abidjan, Cote D’Ivoire. In other words, the number of kilometres to be covered by that project is 8 times higher than Nigeria’s Lagos-Ibadan Expressway project; and the cost per kilometre is far lower than that of Nigeria.

At N240 billion projected maximum cost, the cost of ECOWAS road project per kilometre is N234 million while the six-lane Lagos-Ibadan Expressway contract awarded by the Federal Government at N167 billion costs N1.3 billion per kilometre. And that was eight years ago.

In our view, the message all these scenarios send to Nigerians, particularly the N262 billion budgeted for the country’s highways that need attention to be given at N1 billion or more per kilometre, is that the highways will continue to be in poor condition.

Another message we see in all these is that no particular region in the country—Igbo, Hausa or Yoruba—is marginalized because most roads in the country, especially in the southern part of the country, are in deplorable condition.

But the situation becomes more worrisome considering that even the N262 billion budgetary allocation is not for works alone, but also housing. Added to this, the whole allocation will never be 100 percent released which explains why Lagos-Ibadan Expressway remains a perpetual construction site.

It is noteworthy that the neglect given to roads infrastructure in Nigeria is reason the transport sector in the country is underperforming. It also explains why the contribution of the sector to the gross domestic product (GDP) has been on downward trend.

In the same vein, poor state of roads has impacted businesses negatively, resulting in low productivity of workers as immeasurable man-power is lost to traffic congestion on daily basis. It also serves as a hot-bed for the twin evils of armed robbery and kidnapping.

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