• Wednesday, April 17, 2024
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Developing a multi-modal transportation system: Legal and policy priorities for Nigeria

The flawed Nigerian transportation system

Introduction

Nigeria has huge opportunities in the transportation sector to generate revenue, create jobs, and facilitate movement for business and leisure. Unfortunately, over the years, we have not been able to take advantage of those opportunities largely because of inadequate infrastructure, high operating costs, weak or suboptimal regulations, limited skilled capacity, financial difficulties, and more recently insecurity. These challenges cut across all transportation sectors including rail, road, aviation, and maritime. To successfully develop a multimodal transport system, we first need to understand why these challenges have persisted and then proffer workable solutions. In this article, I identify 5 cross-cutting legal and policy failures. I have also outlined legal and policy priorities for transportation in Nigeria.

Cross-cutting legal and policy failures

1. Over-centralisation and federal dominance – The federal government currently dominates the entire transport sector, not effectively engaging states and local governments. This denies states and especially local communities the opportunity to participate in tackling pressing transport challenges like insecurity.

The fifth alteration to the 1999 Constitution, which now allows States to participate in rail transportation is a step in the right direction. However, a lot more devolution of transportation powers needs to take place. States should be allowed to manage inland waterways, federal intra-state roads, etc.

2. No harmonised policy on transportation – Since Independence, Nigeria through the Federal Ministry of Transportation has developed at least 7 transport policy documents, some of which include: the 1965 Statement of Policy on Transport; the 1993 Transport Policy for Nigeria; the 2003 Draft National Transport Policy Document; the 2008 Draft National Transport Policy; the 2010 Draft National Transport Policy; the 2013 Draft National Transport Policy; and the 2021 Draft National Transport Policy (being the latest). Most of these have remained as drafts and were not implemented. Each state and transport sector (Aviation, Rail, Road, Maritime) has its own policies, most of which sometimes contradict each other.

3. Overlapping institutional mandates – Nigeria’s transport sector currently has too many regulatory agencies with unclear responsibilities. The result is competition over funding and resources, weak inter-agency coordination, administrative bottlenecks between agencies, inter-agency frictions over operational areas, etc. This makes coordination extremely difficult. For example, there is a conflict between the Nigerian Maritime Administration and Safety Agency and the Nigerian Ports Authority (NIMASA) over wreck removal; NIMASA and the National Inland Waterways Authority (NIWA) are also in conflict over who controls the inland waterways. The same applies down the line among the other agencies.

4. Weak Enforcement and Implementation – Enforcement and implementation of policies, laws, and regulations in the transport sector are often lacking due to corruption, inadequate capacity, and insufficient funding. Several airports, airlines, and maritime operators flout stipulated safety standards in their operations, landing procedures, and maintenance schedules due to oversight gaps. Vandalism and trespassing of railway tracks, equipment, and properties is rampant as there is deficient security and enforcement to protect such transport infrastructure

6. Inadequate private sector engagement – This is mostly a result of complex regulatory requirements, limited incentives, and poor contract enforcement. Policies and regulations governing transportation are crafted without sufficient private sector inputs and perspectives, leading to business-unfriendly policies. There is minimal private sector participation in the development of inland water transport infrastructure and services, leading to the underutilization of Nigeria’s vast river systems. Additionally, private companies play negligible roles in railway operations, leaving rail transportation underfunded and inefficient, apart from select attempts at railway concessions. Most federal roads are funded solely by the government, with very little private sector involvement through public-private partnerships (PPPs), which leaves the roads in poor shape.

Legal and policy priorities

1. Harmonized transportation policy supported by legislation – Nigeria would benefit greatly from the development of a harmonized national transportation policy that is supported by legislation, and which integrates all levels of government and the private sector. The Federal Ministry of Transport should play a coordinating role in this regard. Such a multimodal policy would facilitate coordinated infrastructure development, balanced transport investments across regions, unified regulatory standards, robust planning from shared data forecasts, and increased private sector capital. This would eliminate duplicitous efforts through synchronized complementary build out of assets like roads, rails, airports, and seaports. An overarching set of operational, safety, and customer service regulations would also allow better sector oversight. This, in turn, would improve efficiency, quality of service, safety, and cost optimization for both passenger and freight movement by consolidating the strengths of public agencies and private companies across aviation, land, and water transportation.

2. Update existing legislation – There is an urgent need to update existing legislation governing the various transportation sectors to enable much-needed modernization. Key laws requiring amendment include – the antiquated 1955 Railways Act to allow private concessions and public-private partnerships in railways; the 1954 Ports Authority Act to repeal constraints on private port operators and increase privatization; the 2006 Civil Aviation Act to empower the NCAA regulatory agency to enforce stricter safety standards; the 2004 Highway Development Act to attract private infrastructure investors through fairer returns; and the 2004 Inland Waterways Act to provide impetus for private sector partnerships in boosting inland water freight and passenger transportation channels.

3. Enact pending legislation before the National Assembly – There are several pivotal transport sector reform bills pending before Nigeria’s National Assembly that need to be urgently passed to enable a comprehensive revamp. These include – the National Transport Commission Bill to formulate integrated policies across all transport modes and manage safety regulations and consumer protections; the Ports and Harbours Bill to commercialize ports operations and drive efficiency through privatizations; the Railway Development Authority Bill to setup an independent agency that can expand the railway network via private investments; the Road Sector Reform Bill to increase private sector participation in road infrastructure projects; and the National Transport Policy Bill to institute an overarching policy that interlinks aviation, rail, maritime and inland water transport strategies using global best practices customised for Nigeria.

4. Streamline regulatory institutions – Nigeria needs to streamline the complex array of regulatory institutions governing the transportation sector to improve efficiency and reduce costs. This can be achieved by consolidating all road transport agencies under a Federal Highways Authority; merging aviation bodies like FAAN, NCAA and NAMA within a unified Nigerian Aviation Commission; privatising ports management while an expanded Ports Commission oversees regulations; expanding the Rail Transport Safety Commission into a broader oversight mandate; instituting a private sector-supported Automotive Control Authority for vehicular inspection regimes; and setting up an apex Transportation Commission/Ministry to coordinate policies and data sharing across the consolidated entities – covering aspects like infrastructure integration, safety/security assurances, operational efficiency and service delivery enhancements for a holistic advancement of Nigeria’s aviation, rail, road, maritime and inland water transport networks.

5. Privatize and commercialize through PPP – This promises immense benefits including – injecting billions of dollars of private capital annually to bridge huge public infrastructure funding gaps; driving major efficiency improvements in cost optimisation, operational excellence and service quality; enhancing technology utilization for customer experience, safety and transparency; reducing public sector budgetary and operational burdens to focus more on policy oversight; and injecting world-class technical expertise, managerial competencies and global best practices to holistically transform Nigerian transportation.

6. Incentivise transport education and growth of maintenance, repair and overhaul (MRO) facilities. Nigeria needs to incentivise transport education and growth of Maintenance, Repair and Overhaul (MRO) facilities by providing tax rebates and import duty waivers for certified training institutes and MRO centers; subsidizing enrollment fees for technical transport courses via a dedicated Fund to aid affordability; allocating free land or preferential leases at airports and seaports to attract global MRO players; making MRO experience mandates for licensing renewals to compel local facility usage; implementing preferential local content in tenders for contractors evidencing skills transfer; and extending export incentives and tax credits for indigenous MRO firms to support their expansion – all towards addressing the strategic skill gap challenges and strengthening maintenance capabilities vital for advancement of Nigeria’s aviation, rail, road and maritime transport sectors.

7. Strategy on insecurity. Nigeria requires a well-coordinated strategy between federal and state agencies to tackle endemic insecurity in the transport sector via setting up a multi-agency joint taskforce for intelligence sharing and unified patrols; installing sophisticated surveillance systems like sensors, drones and AI-based analytics software integrated for proactive threat response; incentivizing community participation for intelligence gathering on risks; reviewing insurance policies and compensation models to support operators suffering losses; criminalizing activities like rail vandalism etc. to enforce maximum deterrence penalties; and training specialized security units dedicated to safeguarding critical airport, railway, maritime and highway transport infrastructure.

Conclusion

Nigeria has enormous potential to advance its multimodal transportation networks across aviation, rail, road, maritime, and inland waterways. However, several structural issues such as over-centralization, fragmentation, weak institutions, inadequate infrastructure, and insecurity have severely constrained tapping into those opportunities. Implementing the outlined legal and policy priorities focused on greater harmonisation, updating legislative frameworks, consolidating regulatory bodies, increased private sector participation, capacity building, and security improvements promises to set Nigeria firmly on the path towards modern, efficient, integrated, and world-class transport amenities. The time is now for Nigeria to make these pivotal unified, collaborative, and progressive reforms that put in place the enabling conditions for transport operators, investors, and customers alike to thrive.

.Okeke, associate partner & head, Public Sector Practice Group, OIisa Agbakoba Legal (OAL), writes from Lagos.