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  AGRICULTURE   The wealth of a nation is partially measured by its ability to guarantee its citizenry food security.In…

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Rediscover Nigeria Transport Infrastructure

Transport Infrastructure

Inefficient transport infrastructure adds between 7 - 10% to the cost of doing business in Nigeria. As part of the ongoing reforms, the strategy for improving the transport infrastructure emphasizes the leading role of private sector capital. This opens up great avenues for investment. The Federal Government has chosen to kick-start the process with massive investment which will attract private sector capital in the immediate future.

 RAILWAYS

The railway system relies on the infrastructure put in place by the colonial government. There is a total length of only 3,505 kilometers with the last expansion completed in 1965. It is a narrow gauge and single-track system. Though largely responsible for Nigeria's rapid development in the early years after independence, the neglect of the system helped decay to set in.

CARGO / PASSENGER FREIGHT

The railway was the major means of passenger and freight movement before the explosion in road construction and the aviation sector in the mid 1970's and 1980's. Figures released by the Presidency indicate a very impressive performance by the Nigerian Railway Corporation until 1979 when a steady decay set in on the infrastructure and its experienced personnel started depleting.

Year                 No of Commuters

1964                11,288,000

1974                4,342,000

1978                6,700,000

1984                15,000,000

1991                3,000,000

Freight movement also declined from 2.96million tonnes in 1964, 1,098,000 tonnes in 1974 to less than 100,000 tonnes in recent times. Less than 25% of its entire wagons and coaches stock are currently serviceable. This deplorable situation is essentially as a result of very poor management in the past and neglect of the railways on the part of government in preference for road and air transport development

POTENTIAL

The railway has the biggest potential for bulk delivery of cargo in Nigeria considering the massive importation of goods through the seaports and the continued importation of petroleum products. The renewed emphasis on agriculture and export of produce will rely on an improved railway system to be able to reach international markets at competitive prices.

COMMUTERS

Nigeria is a nation where people have very strong family ties. Consequently there is always a very high movement of commuters to various destinations around the country. The railway still represents the cheapest and safest transport mode with the added advantage of mass transit.

The Master plan on Integrated Transport Infrastructure (MITI 2020) recognizes this and has opened an avenue for the development of interdependent modes of transport.

CONCESSION/MASS TRANSIT

The Bureau of Public Enterprises (B.P.E.), the privatization agency of Government is seeking out concessionary arrangements with reputable transport agencies to manage existing railway routes. This however involves some rehabilitation to get value and it is ongoing. Routes that were rehabilitated are currently being utilized for Mass Transit Schemes which moved 1.09Million commuters in 2009 and increased to 1.4Million in 2010.

REHABILITATION

The rehabilitation of the railway system is to start with a 1,315 kilometre line from Lagos to Kano. There will be a loop from Minna in Niger State to Abuja. This line linking Abuja will connect Kaduna. The improved railway system will be based on the construction of a new standard gauge and double track giving passenger trains the advantage of moving at between 120 - 150 km per hour. This is as against the current maximum speed of 40 km per hour on a narrow gauge single track.

Freight trains can enhance their delivery time of cargo as the new system guarantees a maximum speed of 80km per hour.

The rehabilitation of the railways is being undertaken in five segments viz:

Lagos      -    Ibadan

Ibadan    -    Ilorin

Ilorin       -    Minna

Minna      -    Kano

Minna      -    Abuja – Kaduna

US$8.3billion is being committed to the project in the first phase expected to last four years. It is supported by US$2billion soft loan from the Chinese government. The plan to eventually link all state capitals with the railways is a welcome relief after many years of neglect of this essential means of transport. With work commencing on the first phase, the Federal Government is committing $2.5billion immediately with additional funding in fiscal 2007 to keep the project on course. Eventually it is envisaged that about 8,000 kilometres of new standard gauge rail tracks will be added to the railway system.

The Ajaokuta Steel Company and the various steel mills in Nigeria can be very useful in the implementation of this project. It will add value to the economy and justify the enormous investment in steel exploration and the plants over the years.

Working with existing transport unions, a symbiotic relationship will develop which will open up new railway terminals for bus operators to shuttle. Some of the new possible and profitable routes will include:-

LAGOS                     -BENIN          OKENE           ABUJA
CALABAR                  -OGOJA         GBOKO          ABUJA
MAIDUGURI              -BAUCHI        JOS               ABUJA
PORT-HARCOURT     -OWERRI       ONITSHA       ABUJA
LAGOS                     -BENIN          ONITSHA       ENUGU
SOKOTO                  -YAURI           MINNA           ABUJA
PORT HARCOURT     -ENUGU         MAKURDI       JOS
YOLA                        -JALINGO      LAFIA             ABUJA
LAGOS                     -IBADAN        BIDA              ABUJA
KANO                       -ZARIA          KADUNA         ABUJA

METROLINE

The big cities in Nigeria have so much pressure on infrastructure because of the absence of metro lines to move commuters in and out of the cities. Lagos, Abuja, Warri, Port-Harcourt, Ibadan, Kano and Kaduna can do very well with private sector run metro lines moving millions of commuters daily with very impressive profits. The Lagos State Government has made significant progress in its light Rail Project from Badagry to Lagos. Partnerships with many State Governments could be very profitable. Though the financial outlay of putting the infrastructure is enormous, the long-term returns on investment justify them.

INVESTMENT CLIMATE

The legislation giving monopoly to the Nigerian Railway Corporation as the sole operator of railway services has not been repealed. Technically speaking, any operation of rail services now will have to be a joint venture with the Corporation. The Transformation Agenda (which is the blue print for Federal Government's economic reform) envisages an amendment to the legislation soon to enable greater private sector participation. The main document is with the National Assembly (Nigeria’s Parliament). Potential investors should therefore exercise little or no apprehension in engaging government in serious negotiations for concessions.

INLAND WATERWAYS

The 4,200 kilometres of inland waterways in Nigeria are currently in the hands of small operators. This is without regard to the contribution of these waterways to Nigeria's development. Currently, navigation on the inland waterways is confined to specific sections in the rainy season.

IMPEDIMENTS

The major impediments to the growth of waterways transportation are :-

  • Siltation
  • Weeds
  • Low water level
  • Obstacles like wreckages and rock.
  • Aged Water-Crafts.

DEVELOPMENT PLANS

The Federal Government is currently engaged in a project to dredge the River Niger from Warri to Baro. In addition modern river ports are being constructed at Onitsha, Idah, Ajaokuta, Lokoja and Baro with container terminals for transhipment of bulk cargo from sea ports to the hinterland. This development will revolutionize the waterways.

OPPORTUNITIES

The immediate opportunities now are in the operation of ferry services especially in Lagos and in the littoral states of Nigeria where the water levels in the inland rivers guarantee all season navigation. As the dredging of the lower Niger is completed, it opens opportunities for the transportation of Petroleum Products, Agricultural produce, Heavy duty equipments and construction materials. The next four (4) years will be a season of massive construction in Nigeria.

MARITIME

SHIPPING

The Ports in Lagos, Warri, Calabar and Port Harcourt service the needs of Nigeria and some of her land locked neighbours. The volumes of cargo over the past five years from 2006 have shown some improvement even though it ought to be much better.

YEAR

INWARD

OUTWARD

TOTAL/TONNES

2006

31,937,804

17,235,520

49,173,324

2007

35,865,996

21,607,354

57,473,350

2008

41,385,973

23,806,946

65,192,919

2009

49,962,875

16,945,447

66,908,322

2010

50,902,333

24,007,951

74,910,284

Source: Nigerian Ports Authority

Presently, turn around time for vessels from Nigerian ports is 5.9 days.  This has however not deterred importers of goods from patronizing the ports in the neighbouring Republics of Benin and Togo.  As a direct result, while the ports in Lagos are ever busy, those in Warri, Port Harcourt and Calabar are experiencing low capacity utilization.

REFORMS

The Federal Government has chosen to address the issues relating to delays in the turn around time of vessels and improvement in the service delivery of the Ports through concessioning programs and destination inspection of goods.  The ASSYCUDA programme and the computerization of Customs clearing operations have become operational to increase efficiency in Ports administration. This improvement in Port Administration led to an increase in General Cargo Shipment which went up from 8,192,251MT in 2009 to 9,047,030 in 2010.

Regular dredging and maintenance of access has allowed vessels of bigger draught with larger volume of cargo to berth in Nigerian Ports. Turn around time of vessels has also decreased from 6.7 days in 2009 to 5.9 days in 2010 while waiting time for vessels has equally dropped from 50.4 hours in 2009 to 27.4 hours in 2010 work is still ongoing to bring down turn around time for vessels to 48 hours.

CABOTAGE

The need for Nigeria's greater participation in her maritime industry informed the enactment of a Cabotage regulatory instrument.  The preference is for Nigerian owned built and crewed vessels.  In the interim, a 60% Nigerian and 40% foreign ownership ratio is permitted pending the period the country will acquire the necessary capacity.  The booming trade in the oil industry still favours prospective partners for operations in the maritime industry.  Nigeria is increasing capacity for export delivery of crude to firm development efforts.

Ship building and repair facilities exist at NIGERDOCK which has been privatized.  The opportunities open in this sector includes partnering with Nigerians to win big contracts in the oil industry as deep waters exploration are showing a promise grater than was imagined 10 years ago.

The Cabotage Vessel Finance Fund (CVFF) yielded over N13 billion (Approx. US$86.6 million). 285 vessels were registered by the Nigeria Ship Register Office bringing the total to 1,371 with a gross tonnage of 1,966,285.7. The training of seafarers is being improved at the Maritime Academy in Oron.  This infers that potential partners can find the requisite manpower locally to meet legal and institutional requirements for smooth operations in Nigeria.

AVIATION

The Aviation sector has continued to grow since the return of democracy to Nigeria in 1999.  The interesting results posted can be attributed to the concerted effort by the Federal Government in Safety and Security.  Obsolete Infrastructure is being replaced to comply fully with International Civil Aviation Organization (ICAO) standards.  In spite of global economic meltdown and the cash squeeze in the economy, statistics on passenger and aircraft traffic have shown significant increase over the years.

YEAR

2006

2007

2008

2009

2010

Passenger Movement

8,185,609

8,404,551

10,822,772

12,527,464

13,939,418

Aircraft Movement

181,922

177,627

192,560

221,272

236,962

Cargo Movement(kg)

93,247,983

127,283,454

138,811,960

167,434,805

180,645,436

Source: Federal Airports Authority of Nigeria (FAAN)

 

SAFETY AND SECURITY

The Federal Government in pursuit of its policy of making Nigeria the hub of aviation in Africa has continued to invest heavily in safety and security.  The Total Radar Coverage Project by the Nigerian Airspace Management Agency (NAMA) was recently commissioned and it is expected that at the end of the project all aircraft within Nigeria's airspace can be monitored and guided. The project which was delayed for long has now come on stream.

The increased use of Nigeria's airspace and the enormous increase in the frequency of flights to Nigeria by big international airlines demonstrate the rising confidence in Nigeria and the profitability of doing business in the country.

NEW FACILITIES

A new domestic terminal has been built in Lagos.  There are also plans to construct new terminals in Abuja and Port Harcourt to improve passenger comfort in transit.  The refurbishment of the Murtala Mohammed International Airport terminal is complete.  New runways have been executed with ultra modern landing aids in Enugu and Port Harcourt.  The improvement in safety measures will significantly reduce air traffic accidents to acceptable minimum in the industry.  The Nigerian College of Aviation Technology (NCAT), Zaria, has started regular graduation of pilots returning the industry to an era of training its manpower domestically.  It is branching into the training of helicopter pilots for the manpower needs of the oil and gas industry.

Many airports which had closed down in the past including Benin, Akure, Ilorin, Makurdi, Yola, Ibadan and those with marginal activities such as Sokoto, Maiduguri and Bauchi have either scheduled or chartered flights. States such as Gombe, Delta and Akwa Ibom have constructed and commissioned airports in their capitals with scheduled regular flights.

AVIATION AND TOURISM

The expansion of aviation facilities has helped to improve tourist inflow into the country.  The opening of the Bebi Airstrip in Obanlinku, Cross River State serves as a direct service airport for the Obudu Ranch Resort.  Tourism is one of the neglected but potentially big sources of revenue in Nigeria.

The re-opening of Bauchi airstrip to scheduled flights also opens the Yankari National Park to tourists who love nature and wildlife.

In addition, figures available show a remarkable increase in both domestic and International passenger traffic. These are pointers to the growing opportunities in specialized services in the aviation sector.

PASSENGER TRAFFIC

 

YEAR

2009                               2010

DOMESTIC

9,513,738                                  10,727,106

INTERNATIONAL

3,013,726                                 3,212,312

Source: Federal Airports Authority of Nigeria (FAAN)

In August 2010, The United States Federal Airports Authority granted Nigerian Aviation Industry Category 1 which allows Nigerian carriers to fly direct to the United States.

CONCESSIONS TO DOMESTIC AIRLINES

Since the liquidation of Nigeria Airways, it has been difficult for Nigerian carriers to fly direct to the United States of America.  Through the concerted effort of the Federal Airports Authority of Nigeria (FAAN), Nigerian Airspace Management Agency and the Nigerian Civil Aviation Authority (NCAA) to enforce International Standards for passenger safety, Arik Air was also issued a United States Federal Airports Authority operator certification to operate direct flights to the United States.

OPPORTUNITIES

The big opportunities in the aviation industry are presented in joint venture agreements to strengthen the local capacity of operating domestic airlines.  The joint venture will enable them bid and compete favourably along routes which some airlines currently enjoy a near monopoly. New airlines can introduce scheduled flights with better services and more competitive rates. The Federal Airports Authority of Nigeria (FAAN) is eager to expand its facilities to accommodate more modern aircraft and build new terminals on Build, Operate and Transfer Agreements.

In addition, new modern hangers that can carry out all categories of checks on aircrafts will attract patronage for the aviation industry.

IMMIGRATION / FORMALITIES

Immigration formalities are usually concluded in less than 15minutes of arrival for passengers who travel with genuine entry permits into Nigeria.

The computerization of the operations of the Immigration Service coupled with the new dispensation of Nigeria as an investor friendly nation have changed the ugly trends of the past. Request for immigration entry permits are now attended to within 48 hours in Nigeria's missions abroad. The Federal Government is also working on granting multiple entry Visas to genuine investors coming into Nigeria.

ROADS SECTOR

Nigeria has a total of about 200,000km of road network owned by the three tiers of Government i.e. Federal (Trunk/Primary), States (Secondary) and Local Government (Tertiary/Feeder). The major trunk roads owned by the Federal Government carry an estimated 70% of movement of passenger and cargo. Due to the relative underdevelopment of the Railways and Waterways, the load on the trunk roads is heavy.

The Federal Government along the other tiers are investing heavily in roads rehabilitation and upgrading. The Transformation Agenda in its medium term economic framework (2012-2015) allocates a total of N695.5 billion (approx. US$4.636 billion) for roads and bridges and another N250 billion (approx. US$1.666 billion) for their maintenance within the period. The private sector is being invited to take advantage of a Public Private Partnership (PPP) initiative for major highways in Nigeria.

Some of the key roads targeted for concession are as follows:

  • Shagamu-Benin-Asaba Dual Carriageway – 368km
  • Abuja-Kaduna-Kano Dual Carriageway – 378km
  • Lagos-Badagry-Seme Border Dual Carriageway – 78km
  • Port-Harcourt – Enugu Dual Carriageway – 224km
  • Construction of new Lagos-Iseyin-Kaiama-Konkwaso-Kaoje Kwambe-Argungu-Sokoto road–1,020km
  • Enugu-Onitsha Dual Carriageway – 125km
  • River Niger Bridge at Nupeko – 1km
  • River Benue Bridge at Burukku – 1km
  • A Bridge across River Benue at Ibi – 1km
  • 2nd Niger Bridge at Onitsha – 1.4km

Other future Roads and Bridges are:

  • Upgrading and Modernization of Abuja-Abaji-Lokoja-Benin Road
  • Construction and Modernization of Port-Harcourt Ring Road
  • Construction of Bridge over Cross River at Ikom
  • Construction of Bridge over River Niger at Shintaku/Lokoja
  • Construction of Bridge over River Niger at Idah/Agenegbode
  • Construction of Second Lagos Outer Ring Road
  • Construction of New Lagos – Abuja Expressway
  • Construction of Lagos – Warri Coastal Road
  • Upgrading and Modernization of Onitsha – Owerri Road
  • Construction of Bodo – Bonny Road
  • Construction of Nnobi-Abagana-Otuocha-Idah-Itobe-Abuja Road
  • Upgrading and Modernization of Eleme Junction – Onne Port Road
  • Upgrading and Modernization of Okene-Ajaokuta-Ayangba-Otukpa Road
  • Upgrading and Modernization of Ilesha-Akure-Owo-Benin Road
  • Upgrading and Modernization of Calabar-Odukpani-Itu-Ikot Ekpene-Aba-Owerri Road
  • Upgrading and Modernization of Lagos-Ikorodu-Itoikin-Ijebu Ode Road; and
  • Warri-Sapele-Benin Dual Carriageway

 OTHER OPPORTUNITIES

  • With the massive upgrading, rehabilitation and dualization of roads, tremendous opportunities exist in Nigeria for Investors in the following areas:
  • Investment in Nigeria's huge Bitumen reserves estimated at an equivalent of 40 billion barrels of crude oil. This will provide materials for the actualization of the roads projects. The demand for Bitumen is guaranteed by the massive roads upgrade.
  • Equipment leasing for roads construction will experience a leap as construction revs up.
  • Quarry licences are obtainable easily from the Federal Ministry of Solid Minerals
  • Development. The demand for quarry products will increase between 2012 and 2015.
  • The Transformation Agenda will usher in an era in which Engineering professionals will experience a boom in design, supervision and construction projects.
  • Financing of Public Private Sector Partnership Projects.
  • Ownership of construction companies and execution of major roads and bridges contracts. Professional Civil Engineering outfits will enjoy patronage from government at all levels within this period in line with the massive construction projects.

 

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