Infrastructural Development: Road, Railways & Aviation
Bi-Weekly Briefing Paper #2
March 2, 2022
Salihu Moh. Lukman
smlukman@gmail.com
Freelance APC Campaigner
Background – Theoretical Context
A leading member of the PDP and a former Minister of Aviation during former President Goodluck Jonathan’s administration, Mr. Osita Chidoka, as a Guest Columnist in Thisday Newspaper of Friday, February 25, 2022, in the back page under the title, Minister Fashola and the Difference between APC and PDP, argued that ‘infrastructure projects’ impact on the economy is two-fold, short-term economic boom due to increased spending and hiring until the project is complete. Once over, the temporary hires return to joblessness. The long-term benefit includes facilitating trade, movement, and industry and can support economic growth. However, the infrastructure would not unluck growth and individual prosperity without investment in human beings.’ He tried to rationalise his argument that ‘infrastructure would not unluck growth’ with unsubstantiated reference to ‘a 2016 study published in Oxford Review of Economic Policy vol 32’ where he claimed that the author using evidence from China argued that ‘investing in unproductive projects results initially in a boom, as long as construction is ongoing, followed by a bust, when forecasted benefits fail to materialise and projects, therefore, become a drag on the economy. Where investment are debt-financed, overinvesting in unproductive projects results in the build-up of debt, monetary expansion, inability in financial markets, and economic fragility. While infrastructure is essential for economic growth, it must be in tandem with other determinants of economic growth.
First, both the language and the opinions in the submission by Mr. Chidoka, which is supposedly a response to presentation made by Mr. Babatunde Raji Fashola, Minister of Works and Housing to Kano Progressive Youth Wing of All Progressives Congress is disappointing and either deliberately designed to misrepresent both theoretical and empirical conceptions in the debate around infrastructural development or complete ignorance of basic economic logic, which should guide decisions and initiatives of political leaders regarding a country’s investment decisions in relation to physical structures and facilities such as transportation, communication, power, water, etc., otherwise known as infrastructure. If a political leader of the status of Mr. Chidoka could generalise investment in infrastructure as ‘unproductive projects’, it may only confirm the gap between knowledge and governance in the Nigerian context, which weakened and disconnect democracy from being strongly committed to national development and reduces political debates to elementary literary arguments.
Second, it is also doubtful if Mr. Chidoka’s submission is representative of the thinking of PDP leaders. To be fair to the PDP and all its governments between 1999 and 2015, they demonstrated good understanding of the importance of public investments in physical structures and facilities, which was why they initiated many roads, railways, and aviation projects during their sixteen-year tenure. What may be an issue was the lack of, or weak commitment to execute these projects, which was why they were unable to commission any of the projects they started after sixteen years of managing the affairs of Federal Government of Nigeria. In fact, there were many instances whereby projects became either abandoned or funds were released but hardly anything done before 2015. Mr Chidoka’s inability to provide any empirical evidence about how during the sixteen-year tenure of PDP infrastructural development initiatives ‘were in tandem with other determinants of economic growth’ may have been responsible for the poor attempt to misrepresent economic arguments with the generalised submission of ‘unproductive projects.’ Given that Mr. Chidoka had nothing on PDP’s record to compare with initiatives of APC under President Buhari, therefore all public expenditure on infrastructure must be either ‘debt-financed’, ‘overinvestment’ or ‘unproductive.’ This is alarmingly untrue and can only be excused if presented by a secondary school social club debater.
The role of infrastructure in economic development is well documented and settled in the development literature. Indeed, if there is anything being debated at the level of intellectual discourse, amongst economists and econometricians, it is not the imperative of infrastructure but the numerical magnitude of its importance or significance. Pioneer and contemporaneous efforts in the field suggest a positive relationship between infrastructure development and economic growth and report robust positive coefficients. For instance, many scholars and a sizable number of studies have responded to the question of whether public expenditure in relation to investment in infrastructural development is productive. As far back as March 1989, the Journal of Monetary Economics, Volume 23, Issue 2, presented a report of investigation as to whether all government expenditures are productive using production function in which output depended on public capital, private capital and employment. The result showed that the elasticity of output with respect to public capital was between 0.34 and 0.39. This result was interpreted to mean that the marginal productivity of public capital is 70 cents to a dollar.
Other studies such as the one by Robert Eisner of Northwestern University, USA, ‘Infrastructure and regional economic performance: comment,’ New England Economic Review, Federal Reserve Bank of Boston, issue of September 1991, and Ford and Poret, ‘Infrastructure and private-sector productivity,’ OECD, 1991, using macro time series approach all found evidence that marginal product of government capital is higher than the marginal products of private capital. Many studies have demonstrated empirical results showing the positive indirect effect, crowding-in effect, as well as the direct effect as an input factor, and showing a strong linkage between public infrastructure and the private sector, particularly after economic crises. In other words, investment in infrastructure stimulate growth of economic activities.
The generalisation by Mr. Chidoka suggesting that investment in infrastructure is unproductive is simply dishonest. In fact, such generalisation contradicts the policy direction of all PDP governments between 1999 and 2015, which was for instance well-articulated in Chapter Seven of the National Economic Empowerment Development Strategy (NEEDS) document of the former President Olusegun Obasanjo administration, which had as one of its targets ‘Mobilisation of national resources to facilitate the development of strategic economic infrastructure that improves the general effectiveness of Nigeria as a preferred investment destination.’ This is a clear demonstration that even PDP governments, since 1999, recognise the importance of public investment in developing Nigeria’s infrastructure to stimulate economic activities in the country. Could Mr. Chidoka have served PDP government without understanding the theoretical orientation and commitments of PDP governments on matters such as infrastructural development? Could his (Mr. Chidoka’s) unfamiliarity with the commitments of PDP government account for why he was unable to make any attempt to highlight achievements of PDP governments?
Empirical Context – Road, Railways & Aviation
Without any doubt, one of the areas APC Administration of President Muhammadu Buhari departs radically from all PDP administrations is the drive to develop road, railways and aviation infrastructure across every part of the country. APC led Federal Government has boldly pursued reforms aimed at laying a solid and sustainable foundation for the greatness of Nigeria in these areas. More roads and railways infrastructure are being built and/or completed since 2015, than in the sixteen years under PDP between 1999 and 2015. Several landmark infrastructure initiatives are being implemented.
Presidential Infrastructure Development Fund (PIDF), Infrastructure Company (InfraCo), Highway Development Maintenance Initiative (HDMI), Sovereign Sukuk Bonds, and the Infrastructure Tax Credit Scheme have been initiated to mobilise and coordinate application of national resources to execute specific projects. These are unprecedented initiatives in developing and upgrading national infrastructure. Equally unparalleled is President Buhari’s commitment to completing abandoned and unfinished projects inherited from previous PDP administrations.
For instance, the 327km Itakpe-Warri Standard Gauge Rail was completed by APC led administration of President Buhari 33 years after construction began. The 168 km Abuja-Kaduna Rail project, and the 42.5 km Abuja Light Rail project, both inherited from previous PDP administrations, were completed in 2016 and 2018 respectively. The second Niger Bridge, originally conceived decades ago, is now more than 50 percent completed, and scheduled for commissioning this year (2022). Similarly, the Lagos-Ibadan Expressway, which has defied every administration since 1999 is scheduled to be completed also this year (2022).
In the area of roads and bridges, work has since resumed on several stalled, abandoned or solution-defying road projects that were inherited from PDP administrations, like the Loko-Oweto Bridge, Sagamu-Benin Expressway, the Enugu-Port Harcourt Expressway, Onitsha-Enugu Expressway, Kano-Maiduguri Expressway, Abuja-Kaduna-Zaria-Kano Expressway, Obajana-Kabba Road, Ilorin-Jebba Road, Apapa-Oshodi-Oworonshoki Road, and several others are in progress, with some already close to completion. A brand new bridge in Ikom, Cross River State, has just been completed, which replaced the dilapidated steel truss bridge originally built five decades ago.
Construction work on the Second Niger Bridge, a contract awarded multiple times between 2002 and 2015, during the sixteen-year tenure of PDP governments, but constantly stalled for lack of funding, finally kicked off in 2018, with guaranteed funding, for the first time in the history of the project. In 2017, construction finally commenced on the Bodo-Bonny Bridges and Road (linking Bonny Island to the Rivers Mainland), a project first mooted decades ago, and awarded a number of times without success under PDP administration.
Although it can be acknowledged that all PDP governments between 1999 and 2015 recognise the importance of public investment to develop the nation’s infrastructure, one of the evidences that best highlight lack of commitment is how much goes into the federal government’s annual budget. For instance, in 2015, the total budget for Federal Roads by the outgoing PDP government of former President Goodluck Jonathan was 18 billion Naira. This kind of abysmally low funding translated to abandoned or slow-moving road projects across the country. The APC administration of President Buhari increased the funding in 2016 to 260 billion Naira.
Through increased budgetary provisions, combined with funding initiative under the PIDF, InfraCo, HDMI, Sukuk Bond and Infrastructure Tax Credit Scheme, APC led administration of President Buhari is, according to the Federal Ministry of Works and Housing, executing around 900 active road contracts, covering the construction, reconstruction or rehabilitation of more than 13,000 km of Federal roads and highways across the country, out of a total of 35,000 km of Federal roads in existence. The financing jinx for large-scale infrastructure projects was resolved with all the landmark and innovative methods. Specifically, PIDF, in 2018, provided $650m seed funding and Sukuk bond has mobilised over one billion dollars. Under the HDMI, the Federal Government is expecting capital investment of N1.13 trillion. Twelve (12) roads are being considered for Value-Added Concessions in the first phase with employment potential estimated at about 50,000 direct jobs and 200,000 indirect jobs.
Accordingly, APC administration of President Buhari has commissioned the 156 km Lagos-Ibadan Standard Gauge Rail, the first double-track Standard Gauge Rail project in West Africa (and the first Standard Gauge Rail project in Nigeria to be started and completed by the same administration). Other landmark projects being completed include the Bodo-Bonny Road in Rivers State, Apapa-Oshodi-Oworonshoki Expressway, Loko-Oweto Bridge connecting Benue and Nasarawa States across the River Benue, Port Harcourt-Enugu Expressway, East-West Road (across Delta, Bayelsa, Rivers, Akwa-Ibom and Cross River States), the new Ikom Bridge in Cross River, Abuja-Kaduna-Zaria-Kano Expressway, Keffi-Akwanga-Lafia-Makurdi Road, and many more.
In Aviation sector, New International Airport Terminals have been completed and commissioned in Abuja and Port Harcourt, while those in Lagos and Kano are being completed. In addition, brand new Runways have been constructed in Abuja and Enugu, in 2017 and 2020 respectively. In May 2016, the APC led administration of President Buhari launched its Aviation Roadmap, with the aim of transforming the sector, in terms of safety, infrastructure and economic viability. Major highlights of the Roadmap include the Establishment of a National Carrier, Development of Agro-Allied/Cargo Terminals, Concessioning of the Major International Airports, Establishment of Maintenance, Repair and Overhaul (MRO) Center, Establishment of an Aviation Leasing Company, Development of Aerotropolis (Airport Cities), Establishment of an Aerospace University, Designation of 4 International Airports as Special Economic Zones, Upgrade of Accident Investigation Bureau (AIB) and the Nigerian College of Aviation Technology (NCAT).
Since the launching of the Aviation Roadmap, the Ministry of Aviation has focused on implemention. In terms of infrastructure, the new Terminals of the Port Harcourt, Abuja and Kano International Airports, inherited from the previous PDP administration, have been completed, while the new Lagos Terminal is very close to completion. Brand new Runways have been constructed at the Abuja and Enugu International Airports, in 2017 and 2020, respectively.
More than a dozen airports around the country have had Low Level Windshear Alert Systems (LLWAS) installed, to improve flight safety. Investigations revealed that the Sosoliso and ADC plane crashes of 2005 and 2006 respectively were caused by the absence of LLWAS in the airports. The Lagos and Abuja Airports have had the Category 3 Instrument Landing System (ILS) installed – which provides the capability for landing safely and accurately in conditions of near-zero visibility.
The Concession process for the Lagos, Abuja, Kano and Port Harcourt International Airports – the four main International Airports in the country – is ongoing, with completion of the process scheduled for this year (2022). A significant portion of the investment into the Aviation Sector has been focused on resolving issues and bridging gaps inherited from previous PDP Administrations. One example is the payment of pensions owed to staff of the defunct Nigeria Airways. President Buhari approved that the backlog of almost twenty years be cleared, and has released the funds. The reconstruction of the Runways in Abuja and Enugu were also long overdue, but neglected by previous PDP governments. Investments that should have been made over the decades are now finally being made.
Under the APC led government of President Buhari, the Nigerian College of Aviation Technology (NCAT) has acquired several new training aircraft, and has been recognised globally by the International Civil Aviation Organisation. Among other things the NCAT now has a brand new Boeing 737 Full Flight Simulator, as well as a fully-automated Fire and Smoke Aircraft Training Simulator, which now means that Nigerian personnel no longer have to be sent to Cameroon for training on tackling aircraft fires and smoke, which was the case throughout the sixteen years of PDP tenure between 1999 and 2015.
The Accident Investigation Bureau (AIB) now has a world-class Flight Safety Laboratory, which means that Airplane Recorders, popularly known as “Black Box”, no longer have to be sent abroad for analysis. Furthermore, the AIB is now actively providing technical support and services to other African countries, including assisting Sierra Leone to set up its own Accident Investigation Agency, in 2021.
On the matter of the new private-sector-led National Carrier, the Minister of Aviation, Sen. Hadi Sirika, has assured that the establishment process is still on course, with a target commencement date for operations in Q3 2022. In May 2021, President Buhari approved the designation of the 4 major International Airports in the country as Special Economic Zones. The procurement processes for the establishment of an Aviation Leasing Company, a Maintenance, Repair and Overhaul (MRO) Center, and an Aerospace University are also all ongoing.
In the railway sector, in addition to Lagos-Ibadan, Itakpe-Warri Standard Gauge Rail lines and the Abuja Light Rail, APC led government has also initiated the Kano-Maiduguri Standard Gauge Rail, and the revamping of Port-Harcourt-Maiduguri Narrow Gauge Rail. Financing negotiations is also ongoing for Ibadan-Kano Standard Gauge Rail Project. There is of course the Kano-Maradi 387 km Standard Gauge Rail, for which construction work commenced in February 2021.
Conclusion
Debate about what differentiate APC government from all previous PDP government in relation infrastructural development should not be reduced to literary debates. It is about looking at all the evidences. It will be imprudent to seek to develop or conjecture some theories to nullify concrete evidences of APC’s achievement. In fact, failure to recognise evidences by PDP leaders such as Mr. Chidoka demonstrate unwillingness to learn from their past mistakes, which could mean if they come back to power, they will make the same old mistakes of running government based on weak or lack of commitment to prioritise investment in infrastructural development.
Comparative debate about what differentiate APC from PDP require some measure of honesty not denial. It is not about grandstanding but recognising how far Nigeria’s democracy has evolved and the extent to which it is facilitating national development. When politicians of the status of a former Minister of the Federal Republic such as Mr. Osita Chidoka reduces debate about initiatives of government to the level of literary debate, only demonstrates high contempt for national development. Mr. Chidoka and PDP leaders need to grow out of their prebendal politics of sharing government revenue, which ends up in private accounts of public officials. Government revenue should be invested in tangible projects that would facilitate and support the growth of economic activities. Nigerian politics and democracy must prioritise the execution of these tangible projects across every part of the country, which is the focus of the APC led government of President Buhari.
