By Oyeniyi Iwakun
In the quest to ameliorate the infrastructure decay and also to improve the mode and means of transportation of humans, goods and services especially from the ports to other parts of the nation, the Nigerian Shippers’ Council (NSC) and the Federal Ministry of Transportation which have been at the forefront of promoting the Inland Dry Ports (IDP) and Truck Transit Parks (TTP) took a giant step recently by organizing a breakfast meeting with major policy makers and stakeholder in Lagos to discuss the possible means of financing the aforementioned projects in Nigeria. Here are some of the keynote addresses. Excerpts:
Senator Adamu Aliero Former Kebbi State Governor and FCT Minister:
I want to thank the NSC under the supervision of Federal Ministry of Transportation for organizing this programme.
I believe the programme is about transport infrastructure, IDPs and TTPs. This is very timely as I said because we have realized that there is serious deficit in our infrastructure and all we need to overcome this deficit is palliative for funds and government doesn’t have these funds. How do we get these funds? Definitely it is through the private sector. Already, the NSC has come up with PPP model and let me warn here that the government has no business in either the IDPs or TTPs. It should therefore be the responsibilities of the private sector if you don’t want it to disappear because the moment government comes in, then there will be problem of management like we have seen in all government enterprises. They have failed because there is no co-operation, no corporate governance and we in the National Assembly are prepared to come up with very strong legislation that will encourage the private sector to step into this TTP project.
On the issue of IDPS, they are very viable, the only thing that it requests we know is to conduct feasibility study, once that is done, the investors will be willing to sponsor. Let me give you an example, since 2005 we proposed a dry port in Kebbi state when I was the governor. That dry port is only six hours (6hrs) away from Port Novo. If we had completed that dry port, on weekly basis, we would be clearing close to about One thousand (1000) containers and fortunately these containers are now coming through Badagry ports but because of our inability to formalize all necessary procedures with the Federal Ministry of Transportation, my governor will talk a lot on that when he comes.
So, I will like the Federal Ministry of Transportation to immediately give us the approval so that this dry port will come into function. Secondly, I will like the ministry of transportation to immediately complete the ongoing dredging on the River Niger. If you do this, it would go a long way in solving transportation problem in Nigeria.
Government has been spending so much money on road reconstruction and road rehabilitation area. We have seen on the video clips how bad our roads are. Even if you rehabilitate a road, it won’t take more than two years before it develops pot holes simply because we have only heavy duty items like cement and others and these roads would start developing pot holes easily. So there are many ways you can stop this, by either transporting this heavy duty items by rail or you use dry ports. And the dredging idea is supposed to start from Warri that is Niger-Delta to Baro and now to Yahuri in Kebbi State and equally, there is a part to also dredge River Benue up to Makurdi. Once this is done, the transport infrastructure would greatly be improved.
Let me also say that the private sector should not shy away from this kind of project. I am happy that I am one of the first people that introduced PPP on road construction when I was the minister for Federal Capital Territory (FCT). We all know that the Airport road and equally Kubwa road down to Abuja used to be only forests. I introduced the PPP on the construction and rehabilitation of these roads. We only provided forty percent {40%} of what is required to construct these roads from the private sector through the bond market which the last speaker talked about provided sixty percent (60%). I am happy now today; these roads are now completed and put into effective use. Or else, without these roads, Abuja would have been like what Lagos used to be. Most of you are aware that in 2007, 2008, for you to come to Abuja by vehicle, it would take you two and a half hours and for you to also leave the city to Abuja it would take you the same but today, you can ply these roads for only twenty (20) to forty (40) minutes. This is what PPP project can do and I am sure the same thing can be applied to the issue of TTPs and IDPs. Once again, I commend the Nigerian Shippers’ Council and my friend and brother, the Minister for Transportation, Rt. Hon. Rotimi Amaechi for this innovation.
Oscar N. Onyema, Chief Executive Officer (CEO), Nigerian Stock Exchange,
Distinguished Ladies and gentlemen, I am honoured to be invited here today to speak on a subject matter that impacts each and every one of us, our families and the nation’s economic trajectory. I must commend the organizers, the Federal Ministry of Transportation and the Nigerian Shippers’ Council (NSC) for taking the initiative to bring such pertinent topic to the fore.
The transport sector is one of the engines of growth and prosperity in any economy and in improving the quality and viability of the Nigeria’s transport infrastructure and services. We have to reduce the cost of transportation in Nigeria; attract domestic and foreign investment into the country; expand access to economic opportunities.
When we consider the transport infrastructure development funding gap which is estimated to be greater than Seven hundred and fifty (750) million dollars over the cost of the next thirty (30) years, it becomes very clear that discussions about financing Nigerian transport infrastructure could not be less timely. This is particularly true at a time when the federal government has made a commitment to diversifying the nation’s economy away from its dependence on crude oil as its major export as well as growing strategic sectors of the economy including agriculture and tourism.
Given that the national budget is approximately twenty four (24) billion dollars and the required capital investment in transportation infrastructure is approximately twenty five (25) billion dollars, it is obvious that attracting private sector funds is the only way to bridge the finance gap. The financial participation of the private sector in building infrastructure can take a number of months including Public Private Partnerships (PPP) and full privatization. A good example is the Lekki-Epe Expressway toll-roads concession project. Nigeria’s first ever PPP but this project, the Lekki Concession Company was able to secure more chance of financing to the tune of fifty (50) billion naira for the construction of phases of the project with the participation of several local and international financial institutions. Our trenches which were regarded as ground breaking in Nigeria.
From our perspective at the Nigerian services tune, we are committed to exploring and developing in varying ways to finance the nation’s transport infrastructure in order to accelerate the growth of this sector of the economy.
Hydrogen established PPP funding mechanisms; Special purpose vehicles can utilize the Nigerian Stock Exchange partners to gain access to low cost and more funding capital. This can be exchanged via public bond issuance by the oil companies or by incorporating certain companies to issue bonds and lot to proceed with the project funding.
The special purpose vehicle involves the PPP project and can also utilize funding from listed funds, focused on PPP infrastructure investment. A good case of this is our recent partnership with the Lagos State government on future scale sanitation solution where a fifty (50) million channel finance implementation of the inner Lagos initiative was issued.
In general, the investment prospects of transportation infrastructure and policy if the recently exposed draft rules by Pension Commission (PENCOM) are issued, they will allow for up to 20% of accumulated pension assets which today is about 7.16trillion naira to be invested in infrastructure. This doesn’t include financial investments from insurance, in savings and fund managers.
Over the years, The Nigerian Stock Exchange has implemented far reaching transformational policies aimed at providing products that align with investors requirements, increasing market access and ensuring a thorough and orderly market vis-a-vis the capital market witnessed the growth of the Nigerian infrastructure debt fund which is built to raise two hundred (200) billion naira. This fund which has its own investment focus on traditional infrastructure sector primarily is an ideal investment vehicle for the planned Truck Transit Parks (TTPs) and Inland Dry Port (IDPs). We believe that these achievements will improve investor’s confidence and would go a long way to support the Federal Ministry of Transportation and the Nigerian Shippers’ Council (NCS) quest to unlock the private sector of investment required for financing the transport infrastructure gap. Looking ahead the Nigerian Stock Exchange will continue to seek ways to open the market by actually working to launch an infrastructure funds that are having focuses on sectors like transport for connectivity.
Facilities such as TTPs and IDPs are very imperative for any nation serious about fostering intra and cross border trade. Therefore, there must be a concerted effort to access the capital rate opportunity that exists within and outside capital market.
I appreciate that this discourse this morning will contribute to the bright future of the Nigerian transport sectors and I look forward to a rich and productive discussion.
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