Government’s road infrastructure programme and national debt burden

Of recent, the issues of Nigeria’s mounting national debt, high cost of servicing them and how to recoup monies spent on constructing critical infrastructure, have become a subject of intense public interest.

Attention was drawn to the complex mix of debt to Gross Domestic Product (GDP) of the country, when the Senate approved President Buhari’s request for external loans ranging from $8,325,526,537 (USD) and €490,000,000 (Euros) under the 2018-2020 External Borrowing (Rolling) Plan.

Before approving the loan requests, the Senate considered a report on the 2018-202 External Borrowing (Rolling) Plan by the Committee on Local and Foreign Debt. Chairman Senate Committee on Internal and External Borrowing, Senator Clifford Ordia, said Nigerians had nothing to worry about, stressing that the loans are strictly tied to crucial national infrastructure.

The Senator had during his presentation, explained that his committee “noted with utmost importance, the genuine and very serious concerns of Nigerians about the level of sustainability and serviceability of the country’s borrowings in the last 10 years.

“Our debt service figures constitute a huge drain on our revenue to the extent that it accounts for over 30 percent of our expenditure in the annual budget,” he stated. Ordia added that due to the shortfall in the country’s annual revenues relative to the need for rapid infrastructure and human capital development, “we had to pass deficit budget every year, requiring us to borrow to finance the deficit in our budget.”

Ordia noted that out of the total borrowing request of $36,837,281,256 contained in the re-forwarded request of Mr. President, a sum of $26,154,536,533 is for funds proposed to be borrowed from various financial institutions from the Peoples Republic of China.

According to the committee chairman, the proposed projects could be found in the Ministries of Transportation, Federal Capital Territory (FCT), Aviation, Works & Housing, Agriculture and Water Resources.

He said some are also within some Commissions, such as National Universities Commission, North East Development Commission and the National Identity Management Commission, stressing that they are mostly ongoing projects and programmes for which External Borrowed funds had been spent in the past, including loans.

It would be recalled that the Senate had approved $2.9billion for China Exim Bank, the understanding was that since the projects to be covered by the fund fell under the direct supervision of the Minister of Works and Housing, Babatunde Fashola, it would be judiciously applied.

While some people criticised the loan, after scrutinising the projects tied to the fund, it was obvious that the Senate President, Ahmad Lawan and the Odia Committee were deserving of commendation.

The Senate was satisfied with the Ministers of Works/Housing and his Finance counterpart, especially for the creativity deployed in the allocations, especially given that that was the only way that road infrastructure could be financed. If similar expertise had been applied to such roads as, Lagos-Ibadan, Benin- Shagamu, or even the Enugu-Onitsha road, they would not have remained in their present ugly shape in the past 20 years.

In contrast, the Keffi-Makurdi road, which was financed through the same structure would be delivered according to the time frame. The Federal Government, particularly the Federal Ministry of Works and Housing should be commended for extending the Kefii-Makurdi Highway to Enugu State, the Ninth Mile corner precisely.

It would be recalled that it was a policy of the Federal Government that roads entering each of the states should be a dual carriage way. Perhaps, it is the understanding of the implication of that national policy on roads that informed Buhari administration’s insistence on funding highways through loans.

A special feature of the current national Trunk A roads masterplan is the update in the designs. For instance, from the engineering design of Makurdi to Ninth Mile Enugu road, provision was made for a by-pass such that the road intersection would not create traffic snarls.

Although the administration of Sullivan Chime tried to reduce the volume of traffic at the Ninth Mile junction by opening up the Opi-Nike Road link, the traffic situation at the Ninth Mile remains chaotic. It is this bedlam that the by-pass being envisaged in the Makurdi – Enugu highway extension.

The Ninth Mile corner is a very busy junction because it serves as an intersection for Enugu-Port Harcourt and Enugu-Onitsha Highways, as well as the Makurdi-Enugu inlets to Benue and Enugu states capitals. It is an important hub or relay for exchange among Southeast, North Central and South/South.

The importance of the by-pass could not be overemphasised due to the fact that evacuating goods and products from Port Harcourt, Calabar Port to the Northern part of the country would reduce the pressure on the Lagos and Apapa Ports.

What the Federal Government through the Ministers of Finance and Works/Housing has done is to enhance the economic potentials of the three zones. The ministers should be commended for the wisdom displayed in the budget, particularly the counterpart funding needed to commence the projects this fiscal year. By focusing on road infrastructure, Fashola and Ahmed have shown deep understanding that infrastructure uplift is necessary to rev up economic activities in the country.

Chairman Senate committee, Odia discovered this when he declared: “These projects have a great multiplier effect on stimulating economic growth through infrastructure Development, Job creation and Poverty alleviation, stimulation of Commercial and Engineering activities and the consequent tax revenues payable to Government as a result of these productive activities.”

From documents sighted at the Finance Ministry, it was shown that the funding agencies include, World Bank ($796,000,000); China Exim Bank, ($2,901,026,509); Industrial Commercial Bank of China, ($2,484,555,304); African Development Bank, ($104,200,000); Africa Growing Together Fund, ($20,000,000); French Development Agency, (€240,000,000); European Investment Bank, (€250,000,000); European ECA/KfW/IPEX/AFC, ($1,959,744,724) and International Fund For Agricultural Development (IFAD), $60,000,000.

Toll, Payback
AS part of its determination to show that it was not plunging Nigerians into perpetual debt overhang, the Federal Government approved a tolling policy and regulations. The major plank of that policy direction is to prove the viability of the roads, as well as ensure that when they tolled, the roads for which the loan facilities were procured would pay for itself in record time.

It should be noted that for long Nigeria’s trunk A highways have been left unattended to despite the large volume of traffic, particularly by haulage and articulated vehicles. The implication of that seeming neglect could be seen in the dilapidation that have taken place on the roads within the last 20 years.

Based on the deplorable situation of these very important arteries in the country, the importance of the construction of Abuja-Lafia-Makurdi-Oturkpo-Enugu to the Federal Government could not be overemphasised.

A tour through the roads revealed that appreciable progress has already been recorded in the 5.4kilometre expansion construction of the Abuja-Keffi Highway, as well as the Phase 1 dualization of Keffi-Akwanga-Lafia-Makurdi Road, construction of the Lafia Bypass and the phase 11, which is the dualization of 9th Mile(Enugu)-Otukpo-Makurdi Road project.

When completed it is expected that the road would provide a ready and alternative access to Abuja, the nation’s capital for products and commuters from the Southern part of the country. Most importantly the road would help to reduce pressure occasioned by increased volume of traffic on the highway, enhance road safety, just as it expands economic development along the adjoining towns and communities.

There are two perspectives to the benefits of the two phased road projects. For the expanded work on the 5.4kilometre Abuja-Keffi road and the dualization of Keffi-Akwanga-Lafia-Makurdi road, the two-lane auxillary roads on both sides of the existing lane section will spur complementary feeder roads in Nasarawa and Benue States.

On the Lafia bypass as well as the dualisation of Ninth Mile Enugu-Oturkpo-Makurdi highway, which verges of the eastern flank of Lafia City down to the Southeast, the 268.5 kilometre road has a two way two lane design. This will boost attract economic activities in both Benue and Enugu States.

Of recent, both Lafia and Makurdi, with their huge population growth, have been witnessing rapid development. Those who oppose the injection of borrowed funds into the development of critical infrastructure in Nigeria lose sight of the enormous socio-cultural benefits that accrue therefrom.

Perhaps, owing to the languid nature of activities in Port Harcourt and hyperactivity in the Lagos and Apapa Ports, the major axial roads from Southwest to Abuja, have been inundated with large volume of traffic.

Consequently, the need to compensate the situation with another transportation corridor became urgent. Being Nigeria’s former capital and housing the largest port city in Nigeria, Lagos services 35 per cent of the country’s national industrial enterprises as the nation’s economic centre.

With Abuja as centre, therefore connecting the three economic basins, Lagos, Kano and Port Harcourt became a crucial desideratum for socio-economic progress. Port Harcourt’s uniqueness as the home of Nigeria’s oil industry and second largest Port, has of recent become critical hub for the export of coal, petroleum products. Products from Nigeria’s desert Port, Kano, including tin, antimony ore and peanuts find their way to Port Harcourt for eventual export.

Based on these new realities, expanding the current two-way two-lane road into a two-way four-lane road, will no doubt break the bottleneck occasioned by the Kano-Port Harcourt section, which is only a two-lane road.

It could be seen that the new road transformation master plan by the Federal Government might have been informed by the need to strengthen the interconnection between ports and inland cities.

It is left to be seen how this impetus would also improve regional transportation conditions, particularly accelerating the development of Nigeria’s agriculture, light industry, industrial and other industries that have been gaining traction slowly.

When the Senate resumes, part of its task is to follow up on the utilisation of the funds. It would be recalled that on July 6, when the Senate approved a total of $6.18bn (N2.3 trillion) External Loan request by President Muhammadu Buhari to fund the 2021 budget deficit, the Committee on Local and Foreign Loans, led by Cliff Ordia, gave its approval stressing that the amount may be raised from multiple sources such as the International Capital Market and any other Multilateral or Bilateral sources as may be available.

While the Ministers of Works and Finance, Babatunde Fashola and Zainab Shamsuna Ahmed, have been commended for the ingenuity in allocation and application of the borrowed funds especially in the road infrastructure, the onus is now on the federal lawmakers to follow up through meticulous oversight.