Transporters offload costs on consumers as bad roads hit cashflow

Consumers are being made to bear the brunt of Nigeria’s roads, as transporters, especially those involved in logistics and haulage whose vehicles are held on the roads for days, are passing on the cost to be able to remain in business.

Findings by BusinessDay showed that a trip that should take two days, now takes six to seven days, as trucks are trapped in collapsed interstate roads across the country. Until recently, when a little palliative was done, the 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 weeks in the ditches and craters that dotted that stretch of the highway.

The Benin Bypass is not an isolated case; 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, Donny Irabor, general manager (GM), fleet business optimisation, at AG Leventis, narrated the frustrating experience 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.

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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.

Bello Yusuf, a truck operator, lamented the damaging effect of ditches on major roads in the country on their trucks, saying it has added to the pain of soaring price of diesel.

“Vehicle spare parts are very expensive. One China tyre sells between N170,000 and N180,000 each while imported used tyre sells for between N100,000 and N110,000 each. Imagine how much a trucker will spend to change the tyres of a truck that goes with 18 to 22 tyres,” Yusuf told BusinessDay.

Also, Femi Oludayo, a civil engineer, told BusinessDay on phone that the Irabor’s story was 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 were 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 kilometre in Africa.

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

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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 kilometre, 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 kilometre of road at between N400 million and N1 billion. This contrasts with what obtains in South Africa where maintaining a kilometre of road costs an equivalent of N7.6 million.