Appraising Nigeria’s infrastructure action plan

For, on my way out, I managed to avail myself to a copy of the document under discussion, a Summary Report of Action Plan An Infrastructural for Nigeria prepared by the African Development Bank Group at Nigeria’s request. The meeting, dubbed High level Policy Dialogue on “Infrastructure and Structural transformation in Nigeria” was held at […]

For, on my way out, I managed to avail myself to a copy of the document under discussion, a Summary Report of Action Plan An Infrastructural for Nigeria prepared by the African Development Bank Group at Nigeria’s request. The meeting, dubbed High level Policy Dialogue on “Infrastructure and Structural transformation in Nigeria” was held at Transcorp Hilton, Abuja, on Monday 29 July 2013 was well attended from the officials I saw and may have been a real dialogue but it was not possible for me to sit through as I had some temporary (I hope) hearing problem like some water was lodged stubbornly in my ears, and the first two speakers had no idea why a public address system was provided in the first place.
The gathering was, from the documents I picked up, aimed at examining ways in which Nigeria could accelerate infrastructural development, reduce poverty and inequality as well as enhance inclusion of the majority in the benefits of the people in the recent 7% plus economic growth. The report “provides a detailed assessment of the current status of services in four key infrastructural sectors in the country and their role within the West African region (transport, electric power, information and communication technologies, and water and sanitation” and went further to set objectives and lay out an action program for achieving them including desired policy and institutional reforms, capital expenditure (for rehabilitation, adding new capacity and proper maintenance) while spelling out specific roles for both the public and the private sectors.
According to the Infrastructure Action Plan, Nigeria would require US $350 billion over 10 years. Project design will cost about US$11.0 billion, capacity building and technical support will amount to US$2.3 billion and the balance will go to capital expenses. Of this, electric power and rural energy will cost US$61 billion; sanitation and waste management will amount to US$64 billion; rehabilitation and expansion of national road network is projected at US$35 billion; and infrastructure for urban roads and mass transit system will gulp US$19 billion and US$ 14 billion respectively. Others are: sea ports, passenger and freight facilities and inland waterways, US$19 billion; urban and rural water supply, US$18 billion; and national communication grid will cost US$15 billion. Addition to transportation fleet will take the balance of US$50.1 billion.
In addition, the nation would require some US$100 billion annually for maintenance, but the discussion on this is very scanty in the plan. However, with the current level of public spending on maintenance put at substantially less than US$1 billion in 2010, it is difficult to see how we can achieve the US$16 billion a year estimated as maintenance for the new infrastructure under this proposed plan. In any case, how does this relate to the earlier estimate of US$100 billion per annum?
How is this money to be raised? Table 6 on Page 35 of the Summary Report estimates that US$154.34 billion will come from the public sector (Budget allocations, Sovereign Wealth fund and some US$50 billion in debts, domestic and offshore) and US$ 131,174 billion in equity and debts of the private sector. (Incidentally the total did not add up and one wonders how such a shoddy table ended up in the report.)
If, like me, you are sceptical of the government’s ability to source the fund, and use it judiciously on this proposal, you may be shocked at the phase two and three. For, this is just the first 10 years. The Action Plan id actually part of The National Integrated Infrastructure Master Plan developed by the National Planning Commission indicating that Nigeria would require US $2.9 trillion in the next 30 years to bridge its huge infrastructure gap!
But that is not even the point. In any case no problem with dreaming big if we take the time to work out what it takes to deliver. Also, infrastructural action plans have by now become the pad since a background report on infrastructure issues in developing countries was provided to the G20 in June 2011 by MDB Working Group on Infrastructure (comprising the African Development
Bank (AfDB), Asian Development Bank (AsDB), European Investment Bank (EIB), Inter-American Development Bank (IADB), Islamic Development Bank (IsDB), and World Bank Group.) Now nations as Angola, Burundi, South Africa and Zimbabwe, as well as cities like New Delhi, are all into infrastructural action plans.
The rationale is solid. Increasing spending on infrastructure leads directly to commensurate increase in Gross Domestic Products. The problem is that increase GDP growth in our contexts has had negligible impacts on employment, popular incomes and well-being. The plan estimates that the additional expenditure will have a significant component of labour services (about US$126 billion) employing some 4.5 million workers. This promise should be taken in the context of the dismal employment generation record of all the money we have so far pumped into electricity and road infrastructure. What will make this different? In any case the system has not found gainful employment for the over 10 million new entrants to the labour market over the last decade. Over 16 million are expected to join the queue in the next 10 years, so what is the 4.5 million really going to do for them?
More critically, it is surprising that “infrastructure” is being defined so narrowly that agriculture and animal husbandry is ignored. Imagine what even US$100 billion would do if it were to be devoted to land development, grazing reserves, machinery, agro industry and services.
The media reports were extensive yet sketchy and I missed the discussions. Hope I can get a summary from the National Planning Commission so the discussion can be moved further. With 2015 around the corner would anyone in government have the time or the inclination to move the plan forward, or would we witness all the money being pumped, or to be pumped, into power and infrastructure eventually diverted to regime survival, personal political agenda and provision of retirement nests. I can’t tell, but what has this political bunch being doing up till now? Now they say they have plans and agendas?