Two fire accidents in succession in Onitsha last week confirmed transporting petrol by road in Nigeria is unproductive, risky and costly. The loss of lives, and destruction of property could have been avoided.
The fires are a telling symptom of a problem: over-reliance on roads for the transport of everything from people to petrol to every corner of the country. Roads across the country, in different conditions from good to poor, account for 90 percent of passenger and freight traffic. Like any overburdened resource, these roads are under immense strain.
Especially because Nigerian cities are expanding while investment in roads, much less rail, is lagging. Air travel, which has its own horror stories, has attracted more investment, but accounts for a small proportion of traffic in Nigeria. Besides it is concentrated in Lagos, Abuja and Port Harcourt, with Lagos enjoying the lion’s share of traffic.
Onitsha, a trading city and home to arguably the largest market in the world, is located along one of the busiest trade routes in Nigeria. With an estimated 8 million residents, Onitsha is 47th largest urban area in the world, and the second largest city in Nigeria, according to the 2019 Demographia Urban Areas Report. Its population density is more than twice that of Toronto. These population estimates which are based satellite imagery make it one of the new urban areas in the world with a population above 5 million.
As Nigerian cities expand (Demographia lists 25 of them) demand for commodities such as petrol will increase as well. Transporting thousands of litres of petrol with tankers which must negotiate already congested roads of these densely populated cities is risky.
From the clogged ports of Apapa to the farthest parts of the country, its unproductive to rely on trucks for moving petrol. It’s abnormal. Tankers ideally are used to move petrol across short distances; the best practice is to use pipelines and trains to deliver the bulk of refined petroleum.
It is expensive too. Every year our under-utilised refineries guzzle billions of naira in overheads that can be used to build cheaper alternatives like new rail networks, expand current ones or construct pipelines to transport the finished products from the Dangote refinery when it is completed.
The fires in Onitsha, and many others waiting to happen, make a solid and urgent case for the Petroleum Industry Bill. A more competitive oil sector will see players come up with innovative technologies to deliver petrol, diesel, aviation fuel and kerosene to their customers cheaply and quickly.
Nigeria isn’t new to the gains that can be derived if its population, especially the density of its growing cities, is harnessed through networks that improve connectivity. Thanks to the reform of the telecoms sector Nigerians are interconnected, sending voice, text and video messages at the click of a button. Our dysfunctional and fragmented transport system remains an obstacle to productivity.
The US is an excellent example of how a network of infrastructure can transform a country. In the 1970s, the US experienced a dramatic improvement in the standard of living and productivity due to a network of roads, electricity grids, telephones and sewages. To a large extent, railways rewrote the economic history of the US. Thousands of kilometres of steel with trains running on them, carried goods from farms to factories which were miles apart, connected the hinterland to ports and docks such that every product made in the US could easily be transported anywhere within and outside the country.
However, an efficient government, incentives such as land grants for railway investors, a robust financial system, a developed agriculture sector and human capital were critical to the rail revolution.
