FROM MAGAZINE: Multimodal Transport Could Be Nigeria’s Next Big Thing

Restructuring of the transport infrastructure and increased public and private investment into this sector is crucial for Nigeria's economic prosperity.
Roy Ezze finds that such a scenario will pave the way for an improved multimodal transport system enabling a seamless interconnection across modes of transport.

The transportation system in Nigeria has suffered long-lasting degradation and neglect, which has a ripple effect on businesses and socio-economic activities that depend on transportation infrastructure to thrive. While the impact of this on businesses and economic growth is quite significant, the excruciating effect on consumers has been devastating in many instances. In fact, communities cut off by lack of access roads, railways or inland waterways infrastructure suffer restricted access to improved quality goods and services which reduces their standard of living and increases their cost of living.

On the other hand, agricultural and other perishable produced in remote economies in Nigeria perish in transit or within the localities because of poor transport infrastructure to move these products to where they are needed. Nigeria’s poor road network cause accidents, loss of lives and goods transported over long distances of sometimes extremely bad roads.

Multimodal transport system enables the seamless interconnection among various modes of transportation, which supports effective distribution of goods and services both within the country and for exports. This facilitates speedy and effective distribution of goods that accelerates economic development. Nigeria’s Minister of State for Aviation, Hadi Sirika, decried the absence of effective inter-modality of air transportation with other transportation modes. He hinted of efforts to connect the Abuja Airport with rail, which would be extended to other international airports. This multi-modal transport system is expected to be driven by the National Integrated Infrastructure Master Plan (NIIMP).

The challenge of lack of functional multimodal transport system in Nigeria creates a gap between the railways and the airports systems. Only roads end up at airports, and for busy cities such as Lagos or Abuja the usual traffic congestion slow down movement of cargo and passengers into the airports. At the Lagos Airport, for instance, the considerably long distance between the local wing and international terminal is not connected with a rail system. Thus, passengers must travel through most times congested roads to connect from one terminal to the other. Industry observers believe that lack of multi-modal infrastructure is one of the stumbling blocks limiting Nigeria’s chances of becoming a major aviation hub in West Africa.

New turn
While plans, roadmaps and blueprints on how to achieve a functional multimodal transportation system in Nigeria have been available in Nigeria, their implementation has been the age-long challenge that needs to be urgently addressed.

Fortunately, the Minister of State for Aviation, Senator Hadi Sirika, announced recently that the Nnamdi Azikiwe International Airport in Abuja, Nigeria’s Federal Capital Territory (FCT), which is being fitted with a new airport terminal will equally be connected to a rail system, and same for other international airports. This will stimulate the movement of perishable and other products using the Abuja. This is also good news for other four major airports which are being readied for concession to private investors.

Nigeria’s Minister of Transport, Rotimi Amaechi, decried the contribution of the transport sector to the Gross National Product, which is 1.41 percent, stating that the transport sector is key to Nigeria’s economic development, and “hold the key to unlocking the vast potential in our cities and rural areas.” He assured that the government is reviewing the modalities to provide better environment to encourage investors in the transport sector. He also invites the private sector to power up Nigeria’s economy by revamping infrastructure across all transportation modes. However, the willingness to receive investors must be backed by ease of doing business in Nigeria, which has been a challenge over the years.

“A lot of the legal and regulatory framework instruments of the agencies in the transportation sector were obsolete,” he said, adding that “the four Transport Sector Reform Bills have undergone various public hearing stages in both chambers of the National Assembly.” According to him, “Transport Reform bills include National Inland Waterways Authority Bill 2015, the Nigerian Ports and Harbour Bill 2015, the Nigerian Railways Authority Bill 2015 and the National Transport Commission Bill, an act to provide for the establishment of National Transport Commission as an independent multi-modal economic regulator and other related matters.

Hadi Sirika said Nigeria is taking steps to concession four major airports in the country, establish a national carrier, and set up maintenance, repair and overhaul (MRO) facility which private investors should take advantage of. The planned concession is, however, facing contention from aviation industry unions demanding transparency in the process of concessioning of Nigeria’s four biggest and most active airports. According to Saleh Dunoma, managing director of the Federal Airports Authority of Nigeria (FAAN), Nigeria’s airports offer numerous opportunities on the landside and the airside for investors. However, controversies associated with previous concessions and public-private partnerships scare away potential investors.

In a related development, a recent meeting of lawyers in the aviation industry in Nigeria charged government to create the atmosphere for transparency in future public-private partnerships to encourage local and foreign investors. This has become necessary to stimulate transportation development alongside the economic recovery on-going in Nigeria. Previous PPPs involving the Lagos Airport is engulfed in controversy, which has put of other potential investors.

Recovering with economic recovery
The Nigerian economy is experiencing a recovery with positive growth recorded in various sectors like agriculture, manufacturing, telecommunication, etc., and this provides needed tailwind for further investments in various economic sectors. While the economic recovery provides tailwind for accelerated development, the managing director of Nigerian Ports Authority (NPA), Hajia Hadiza Bala, underlines the need to effectively address the challenges facing the sector in order to tap into the opportunities the sector presents. Also, the managing director, Nigerian Railway Corporation (NRC), Fidet Okhiria, has shown strong interest in attracting private capital to the railway sector, as he announced recently plans to construct 10 new standard gauge rail lines across Nigeria. The government only needs to get it right with investors.

Nigeria is also hoping on its recently adopted National Economic Recovery and Growth Plan (NERGP) 2017-2020, to drive the economic diversification and strengthen multimodal transportation and other infrastructure. There is hope also that a National Transportation Policy sent to the legislature for approval would help improve the transportation sector.

“While the economy is experiencing recovery, I think now is the best time for investors in transportation and aviation sectors to take position in Nigeria. This is because the improved and growing economy will stimulate production and demand, which will lift the transport sector. It’s a win-win,” said a Lagos-based transport investor and analyst.

The challenge of lack of foreign exchange and difficulty in the repatriation of investors’ revenue which worsened at the height of the recession which lasted from mid 2016 to September 2017 has also led to fervent calls from stakeholders to the Central Bank of Nigeria to ensure the remaining trapped funds are released to their owners.

Nigeria’s economic recovery makes it necessary to expedite the reconstruction of Nigeria’s rail system. Most observers believe the Nigerian rail system stands a good chance of opening up Nigeria’s hinterland which has suffered neglect for decades. This will complement the efforts of some Nigerian airlines like Overland Airways in this regard. Observers are keenly watching to see how the new 10-lane road being constructed to link the Murtala Mohammed Airport to the Lagos city centre can be complemented with a rail system to improve access to the airport. The same goes for the Nnamdi Azikiwe International Airport Abuja which is also marked to receive a rail link. These two airports provide an unprecedented test case for the Nigerian multimodal transportation system.