The proposed N15 trillion infrastructure fund
Against the backdrop of the dearth of critical infrastructure across the country, the plan by the Federal Government to float a N15 trillion infrastructure fund is ambitious but nonetheless a step in the right direction. Besides the need for a careful articulation and implementation of the proposal, it may very well be a good opportunity to formulate an infrastructure policy that can serve the rigour of time and institutionalise correction of the many flaws afflicting the country’s infrastructure system. The system, if it can be so-called, certainly deserves a new lease of life.
All over the world, no country attains great height without alluding to its infrastructure. Nigeria cannot be an exception of success without an infrastructural base; nor can she afford to keep losing opportunities due to lack of good roads, functional railway and metro system as well as efficient electricity power supply. The nation has no doubt wasted substantial human and material resources due to care-free and corrupt attitude embedded in the average citizen and public official. No doubt, the country needs critical infrastructure to boost the economy.
Government proposal regarding infrastructure fund is far from being concrete but it is gladdening all the same that the Federal Government reportedly commenced moves to create an Infrastructure Company (InfraCo) Fund, in collaboration with the Central Bank of Nigeria (CBN), Nigerian Sovereign Wealth Investment Authority (NSIA) and other stakeholders, to bridge the nation’s infrastructure gap. The presidency should walk its talk.
President Muhammadu Buhari disclosed this in a speech delivered virtually on his behalf by Vice President Yemi Osinbajo at the opening session of the 26th Nigerian Economic Summit Group (NESG) conference in Abuja. He stated: “I am pleased to inform you in this regard that we are working actively with CBN, Nigerian Sovereign Wealth Investment Authority and state governments under the auspices of the National Economic Council (NEC) to design and put in place a N15 trillion InfraCo Fund, which will be independently managed.”
It is expected that the InfraCo Fund will help to close the national infrastructure gap and “provide a firm basis for increasing national economic productivity growth.” For a start, the plan, laudable as it is, needs a workable framework followed by diligent and patriotic implementation devoid of selfish and political maneuvering. For decades, lack of critical infrastructure has caused a regression in the country’s development. A flawed structural and administrative arrangement, unfortunately, is partly responsible for the ugly situation.
Roads are left to depreciate no sooner than they are commissioned. The proposed system, if well implemented, can bring about a paradigm shift, whereby, roads would be managed like any other economic asset for value addition. That would improve the condition of the roads and enhance the national economy. A situation where the issue of maintenance is excluded from road development contracts is unhealthy for the country.
The country needs investment in infrastructure. Over the decades, the amount of investment on roads and railway projects is not commensurate to the boost in economic activities. There is lopsidedness in the so-called ownership of roads such that while only the Federal Government can maintain some roads, notwithstanding that the roads pass through states and are used mostly by locals, states have responsibilities for other roads. Sometimes, there is contention over who should maintain which roads, and these are all reflected in the national revenue allocation formula
Some states are compelled to rehabilitate dilapidated federal roads in their jurisdiction and then face herculean task to get a refund. There is therefore need to consider going back to history when the regions maintained their roads through the county councils while the Federal Government handled its trunk roads. That same system should be reinvented with some modifications.
The three tiers of government – federal, state and local councils, should have clearly defined role as far as roads are concerned; and the arrangement should attract mutual respect, particularly in terms of funding. That is one way that roads can be made to avoid gross dilapidation.
Being the cheapest form of transport, railway is needed to reduce road carnage. Bulk cargo is better hauled via the railway to save the roads. Rapid dilapidation of the country’s road network is largely a result of heavy trucking instead of through the railway. It is high time standard railway gauge is introduced on all routes, even if it is done gradually.
Perhaps, one way of handling these challenges is to decentralise the railways and allow states to invest in it, in collaboration with other states and the Federal Government. Not long ago, the Lagos State Government and O’dua Investment expressed interest in rail transport but were refused participation because of the extant NRC Act of 1955, which confers absolute monopoly right on the Federal Government and forbids private sector participation in railway service delivery.
A repeal of the Act would open the way for the private sector. There is always room for public-private partnership in this concept. For instance, government may retain ownership of the rail lines while the private sector provides the services. It is incumbent on the National Assembly to assume relevance in the proposed arrangement; repeal the colonial Railway Act and create room for a modern railway development as a way of boosting the country’s infrastructure and economy.