Finally, a way out

Abreakthrough in collaborative thinking: the deal to cede the reconstruction of the 70 kilometre Ota-Abeokuta highway, a federal road, to Ogun State.  It pierces the core of federal roads’ decay: unsustainable funding.

By that agreement, Ogun State will rebuild and toll to recoup its investment, though the project will be under the Federal Ministry of Works’ road design. 

That design should sort out the road’s eventual make-up: concrete pavement, or the traditional tar — though Senator David Umahi, the works minister, never tires to push his preference for concrete roads which, he says, have an average lifespan of 100 years, with minimal maintenance.

Ogun State mulls a N13 billion loan — a product of a tripartite agreement, it hopes.  Hear Governor Dapo Abiodun, on his funding plan: “I have held several meetings with the Minister of Works where I proposed that as a state, we will go ahead and take a loan of N13 billion on their behalf and then make the money available to their contractor.”

“However,” he qualified the proposed deal, “we must come to a tripartite agreement among us, the state, the Federal Ministry of Works and the Federal Ministry of Finance, that will tie the process of the bond back to a financial institution as a holding fund.”

Aside from joy from a brand new highway — 61 kilometres of it inside Ogun, the remaining nine kilometres in Lagos State — complete with trailer parks and other ancillary facilities, the funding proposal could point to a putative but sustainable alternative to funding federal roads; and rolling up the stock of critical arteries nationwide.

The road funding challenge has been structural, systemic and long-running.   The National Assembly once grilled the late Anthony Anenih, Minister of Works and Housing under President Olusegun Obasanjo, on decayed federal roads, despite a “huge” budgetary outlay.  His riposte was sharp and instructive: make a distinction between paper allocations and actual cash backing! 

Failed funding will birth failed roads.  But that must be rolled back, if we must increase the stock of roads — and allied infrastructure — which stood at ratio 2:5, infrastructure to GDP, as at May 29, when President Muhammadu Buhari left. 

Forty per cent infrastructure to GDP just won’t wash, if the goal is to turn around the real sector, deliver value, seriously tackle poverty and improve lives across the varied economic demographics.

Also, recall that doubling infrastructure-to-GDP ratio, from 1:5 in 2015 to 2:5 in 2023, didn’t come from strict budgetary allocations — the cash was just not there: 20 per cent infrastructure ratio was too lean to fire any viable revenue harvesting.  The parlous federal roads were the stark mirror, which aptly reflected that paralysis.

So, aside from loans, Sukuk bond and other funding innovations, as the Federal Government Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme (RITCS), via Executive Order 007, phases 1 and 2, were also put in place.  By RITCS, corporates like the Dangote Group, NNPC Ltd and others were given mandates to build roads and net off their costs from taxes accruable to the Federal Government, under agreed terms.

RITCS was used to reconstruct and convert, from tar to concrete pavement, the 10-lane  Apapa-Oshodi expressway in Lagos State.  Indeed, by its  agreement with Ogun State, the Federal Government pulled the Ota-Abeokuta road from an earlier RITCS deal.

If this new deal works — and all the parties, especially Ogun State, the core implementation agency, must ensure it does — it will be another viable funding alternative, in the quest for federal-states’ collaboration to fix federal roads; and give the real sector a healthy jab in the arm.

Ogun State has been upbeat in turning that long-decayed corridor into a “world class carriage way”.  Now is the time to walk that talk.

It is also reassuring that both partners have assured they would dispense with needless bureaucracy and paper works; and get down to business fast.  That is the spirit. 

Travelling folks, along that corridor, have endured undue hardship for much too long.  Now is the time to end their shuttle nightmares.