Continued from last week
Finance: – The infrastructure financing gap (demand and supply) is too wide in Nigeria. According to the late Chidi Izuwa, former acting director general of Infrastructure Concession Regulatory Commission (ICRC), about $60 billion would be required to revive the oil and gas sector; about $20 billion to revamp the power sector; $14 billion for road; and between $8 and $17 billion for rail tracks. He also stated that some other sectors that require huge investments include, housing and highways, ports, airports, dams, bridges and tunnels, water and telecommunication. With dwindling oil and gas revenue in Nigeria, which derives 86 percent of its revenue from oil and gas (December 2021), financing infrastructure development is a herculean task.
Poor adoption of Modern Infrastructure Financing Models: Public-Private Partnership (PPP or 3P or P3), which is seen all over the world as the new mantra of public finance initiative (PFI) has not been successful in Nigeria. According to Olufemi A. Oyedele (2012), in “The Challenges of Infrastructure Development in Democratic Governance”, in recent times, the attempt to adopt PPP and concession as methods of infrastructure finance in Nigeria failed many times. Majority of the stakeholders do not understand the principles of PPP and concession. Examples of failed PPP in Nigeria include: The second Lekki Toll Gate project, which was halted due to court case; the Kalto Bagana Road project linking Kogi and Benue States, Osun MKO Abiola Airport, Messrs Maevis Nigeria Limited build, operate and transfer contract for airport landing fee with federal government, ICube airport access gate stickers’ contract, Virgin-Nigeria Airways contract, etc.
Poor adoption of Modern Method of Construction: – There are numerous modern methods of construction that save cost and time, and improve quality.
For example, plastic, mainly PVC, is now the most commonly used material for sewer – drainage systems for the conveyance of wastewater and waste materials from dwellings to the main sewerage and to the sewerage treatment plant. There is 35 percent reduction in cost of reinforced plastics used in drainage compared to reinforced concrete. Interlocking stones and concrete paving may be initially costlier than asphalt paving of roads, but interlocking stones and concrete paving are better in economy performance. Metals, timber and plastic houses perform excellently well as sandcrete blocks and concrete buildings and are cheaper.
Lack of Maintenance Economy: – There is a need to build a maintenance economy which is more than maintenance culture. Maintenance economy is the conservation of materials by every individual involved with maintenance to ensure the proper use of parts and labour, leading to the durability of infrastructure assets.
Minister of works and housing Babatunde Fashola once stated that the biggest challenge of the Nigerian economy was the persistent inability to articulate a sustainable national and sub-national policy framework that will ensure the regular and effective maintenance of public assets, buildings, utilities infrastructure and facilities”. Scheduled maintenance of our infrastructure will make them durable and increase their expiry time (life cycle elongation).
Nigeria already spends $5.9 billion per year on federal infrastructure, equivalent to about five percent of GDP. Existing spending patterns are heavily skewed toward investment, with little provision for operations and maintenance. A further $2.5 billion a year is being lost at the federal level due to inefficiencies of various kinds, most of them associated with the power sector. The under-pricing of electricity is by far the single-largest source of inefficiency, even though cost-recovery tariffs would be affordable for the majority of the population (Vivien Foster & Nataliya Pushak, 2011: Nigerian Infrastructure: A Continental Perspective).
Politics: – According to Gerrit Van der Waldt (2007) in “Municipal management: serving the people”, efficient, economic and effective use of resources to provide value for money (Vfm) for the community in services delivery is one of the important objectives of municipalities. Infrastructural projects in Nigeria are developed based on politics and not to meet value for money. The Lagos – Ibadan Expressway, which is a major commercial link from the Apapa Wharf to the north, through Ibadan, the South South and the East, through Benin, was neglected and the less important Abuja – Kaduna rail-line constructed, in terms of commercial activities. Another way in which politics have hampered the effectiveness of development planning in Nigeria is through the antagonistic strategies of the various political parties with their associated pressure groups (Miguel Uruttia Montoya, Miguel Urrutia & Setsuko Yukawa, 1988: Development Planning in Mixed Economies).
High Cost of Infrastructure Procurement:- The Cable (2019) under, “CRCC to construct 560km railway line in Ghana $2bn”, stated that a 340 km standard gauge railway line in Ghana will be constructed at $2.2 billion while the 146 km railway line between Lagos and Ibadan in south-west Nigeria will cost the country $2 billion. While it will cost Ghana $5.88 million per kilometre, Nigeria will spend $15.07 million per kilometre. The Nigeria Senate once kicked against the N64 billion contracts for the construction of a second runway at the Nnamdi Azikiwe International Airport, Abuja in October, 2015. This was because of multiple loading. They acknowledged the urgent need for a second runway at the airport, but said the contract sum was “just too exorbitant.”
Infrastructure provision has a lot of benefits from being the basis of wealth creation; it helps generate jobs, helps to promote trade and investment; helps to promote healthy living; extreme poverty alleviation; employment generation and crime control. Construction works have the potential of generating jobs for multiple workers from designers to artisans, suppliers and sellers of construction materials and labourers. The banking industry also thrives on infrastructure development. Infrastructure like housing, water, electricity and roads are basic to life.