Infrastructure deficit and challenge of growing Nigerian economy

Human (national) development is about meeting and satisfying basic human needs and aspirations, protecting their freedoms and rights, minimising risks to their survival, enhancing human security, and empowering them to tap and maximise their potential. (Jega, 2010

Infrastructure is central to sustainable development and economic competitiveness of any nation. A nation without infrastructure is like a body without anatomy. Today, inadequate infrastructure is holding back Africa’s economic growth per capita by two per cent each year, and reducing firms’ productivity by as much as 40 per cent (ICA,2010). Sub-Saharan Africa is also lagging behind the rest of the world in its level of infrastructure development, thereby blocking the quick movement of goods and people on the continent and increased transport costs to as much as twice that in any typical Asian country (ICA, 2005).

The largest deficit in infrastructure can be found in the power sector where only one in four Africans have access to electricity with about 30 African countries estimated to be experiencing regular blackouts due to power shortages.  Even though firms struggle to cope by installing their own back-up generators, this costs three to four times as much as the cost of grid electricity.  The 48 sub-Saharan African countries including Nigeria, with some 800 million people, produce collectively only about as much power as Spain, which has only 1/18th of the population (USAID, 2009).The lack of affordable and reliable power is cited by investors as the number one constraint to doing business in most African countries, Nigeria inclusive.

Despite Africa’s great potential which includes clean energy resources such as hydropower, solar, wind, and geothermal, these problems continue to persist because investments in new facilities and maintenance of existing infrastructure have been woefully inadequate, leaving many African countries with degraded and inefficient electricity services; poor quality roads, railways, and ports; and an inadequate ICT backbone (USAID, 2009).

Nigeria by its size and population of about 170 million bears at least 20 per cent of this burden, and the citizens are generally disillusioned with the level of development and distrusting of government because not much has been done in the provision of physical infrastructure 55 years after independence.

It is a recurring decimal of pains that the country faces with poor road, water and sanitation conditions, inadequate electricity, gas, and fuel oil supply, leading to high use of solid fuels (fuel woods) especially for domestic chores. As reported by the World Health Organisation, Nigeria has the highest rate of deaths attributable to solid fuel use, at 79,000 annually and four per cent national burden of disease.

The first power station in Nigeria was established by the Public Works Department in Lagos in 1896, with a capacity of 60MW, while the first private electricity company, Nigerian Electricity Supply Company was set up in 1929, with a capacity of 19MW. The scheme, a hydro-electricity plant on Kura Falls was originally meant to supply electricity to the Tin mines in Jos, but later extended its services to Bukuru, Jos Townships and Kafachan. In subsequent years, other exploitable hydro power sites with cumulative potential of over 12,000MW were identified.

With 120 years of public sector experience, and 87 years of private sector, what is our story?

The National Integrated Power Project scheme was designed as a fast-track Federal Government initiative to resolve the power supply problem in Nigeria, by expanding Generation, Transmission and Distribution capacities.

 The scheme was conceived in the late 2004 and implementation commenced in 2006 under the administration of President Olusegun Obasanjo, but ran into a hitch shortly after the new administration of President Umaru Yar’Adua came on board in May 2007. The initial contentious issue was the legality of the funding process. The Revenue Mobilisation Allocation and Fiscal Commission had instituted a legal action against the mode of utilisation of the proceeds of the excess crude account for the project. As the argument raged on, another controversy arose as to the actual expenditure on the project up to the time.

Various amounts were bandied by officials of both the old and the new administration and the media was awash with all manner of sensational news and commentaries. The matter however came to a head when via a motion moved by the Minority Leader, the House of Representatives resolved to have its Committee on Power probe the entire project. President Yar’Adua, in deference to the House, ordered a stop to further fund disbursements to the project until the outcome of the probe. This decision created apprehension among the contractors, and work stopped for a long while until the resumption of payment to contractors and grant of a 70 per cent waiver on charges incurred on all longstanding containers belonging to the NIPP that were lying at the terminal for about three years.

The NIPP is an amalgam of generation, transmission and distribution projects packaged as Engineering Procurement Construction contracts managed by the Niger Delta Power Holding Company incorporated by government for the purpose.

The project at the outset, according to the Forum of NIPP Consultants and Contractors, engaged the services of a total of 108 consulting and contracting firms, including 34 consulting and 53 contracting Nigerian firms, with about 5000 Nigerian employees as of August 2007. Now, with this array of experts, how did it happen that feedstock, route reconnaissance and delineation issues were not addressed? How did it happen that the construction of Mambilla Dam with an assured 2,600MW, was not commenced immediately since it had a longer completion timeline, and the NIPP didn’t have all the time in the world? Today, we have quite some turbines that have not been cranked years after installation with attendant repercussions.

Could all these and more be due to inadequate planning, negligence and poor management? Could it be due to the fact that the Niger Delta Power Holding Company is managed by a non-engineer? Are the consulting firms, multi-disciplinary partnerships or single family or sole businesses? Are they ACEN firm members? Are these questions even relevant? If not, what are the relevant questions? I engaged a number of important stakeholders and they had so much to say in hush voices. Certainly, engineering, not political questions, as happened in the House of Representatives, need to be asked now as to what really happened that we are where we are at.

The bottom line however is that so much resources have been committed, but of what benefit to the generality of the people? This is the perception among a large segment of the society, and one cannot in good conscience discountenance their opinion. I believe that a technical audit of this project, spearheaded by ACEN is necessary to put paid to the controversies around the projects, learn lessons and develop more sustainable templates for future projects.

There are about 200,000km of roads in Nigeria, and 36,000km belong to the Federal government. Of the latter, only about 30 per cent that are in good condition. The shares of the states and local governments are in terribly worse conditions.

The issues here revolve around poor institutional arrangements. The Ministry of Works is combining policy formulation with implementation and this is proving Herculean. It is common knowledge that the ministry is the only one without fully enabled parastatals for implementation. The road sector bills have been on the table since 2008. They were eventually sent to the Seventh National Assembly but there isn’t enough interest in them yet.

SOURCE:PUNCH