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MINISTER of Works and Housing, Babatunde Fashola, must be shell-shocked at the outcome of his recent parley with the press. The event, at which he had hoped to obtain the understanding and cooperation of the journalists on their reporting of Nigerian roads, has almost turned his nemesis. Reportage of the press conference has portrayed him as an arrogant and insensitive person, who is not only far removed from ordinary Nigerians, but also careless about their road woes.
The point of departure of the minister from ordinary Nigerians is in the extent of the dilapidation of our roads. He wants Nigerians to be informed that the roads are not quite as bad as being portrayed in the media, because some of them are still quite good and motorable. Both the conventional and social media have of late been replete with pictures of totally failed roads in different parts of the country.
Fashola was reported to have said that the bad state of the roads was exaggerated, to which an angry public took exception. And for good reason. While it is true that not all the nation’s roads are bad, the ones that are bad are so many, and so horrendous, that anyone who as much as suggests that they are not so bad cannot but draw the ire of the people.
In his defence, Fashola has come out with a full video and the text of his words at the press conference. In the video, he was recorded as telling the journalists to balance their reports. “The balance,” he said “is also to show that not all of the roads are bad. The focus is on the bad parts … It is good to show that some work is going on … so that people can have hope in the country … some parts are motorable… it is good to have that balance. It is not as bad as they say it is because on a 100km road, maybe it is ten to fifteen kilometers that are bad… It is not all the roads that are unmotorable.”
The furore that these statements have generated has been unrelenting. So, who is right? Fashola or his critics? My take on this matter is that the portions of the roads that are bad are so horrible and that is why they have generated this kind of backlash for the minister. A more detailed consideration of the nation’s road crisis will, however, throw up inadequate funding as the core cause of the bad roads. For example, the budgetary allocations to roads cannot in any way achieve the rehabilitation of the dilapidated roads. A paltry N262 billion is said to be the total allocation to the Works and Housing Ministry in 2020, when it is clear that huge funds are required to make any impact on the state of the roads. Sometime ago, 3300 roads were reported to have been scheduled for rehabilitation in the 2020 budget by the Chairman of the Senate Committee on Land Transport, Senator Abdulfatai Buhari. But Fashola has said that the Federal Government is focusing on the completion of only 504 road project contracts. The 504 road projects have been presented to the Joint Committee of the National Assembly.
The simple truth is that Nigeria cannot afford the huge sums required for the rehabilitation of these roads. As a matter of fact, beyond the mismanagement of public funds by public officials, so much money is required to rehabilitate public infrastructure in all parts of the country, including hospitals, bridges and educational facilities.
It would appear that our leaders have not been circumspect in the management and harnessing of funds into the public treasury. The country needs to do a lot more to generate more funds to meet basic infrastructural needs of the people. We need to focus on the development of other sectors of the economy, especially agriculture and technology, which are the mainstay of some developed economics.
Even the oil sector on which we are dependent needs to be better managed so that we can get the maximum benefits accruable from it. The current situation in which we are so dependent on foreigners for the technology and accounting for crude oil liftings is inexpedient to our quest for better returns from the sector.
It is in this wise that we must commend President Buhari’s recent signing of the amended Deep Offshore and Inland Basin Production Sharing Contract (DOIBPSC). With the signing of that contract, the president has laid a foundation for the country’s greater economic prosperity. The implication of the new contract is that Nigeria will now get a greater share of the money accruing from the exploration of oil by the international oil companies (IOCs).
The signing of the contract has been described as a “coup” against the IOCs. The background of this whole story is that Nigeria agreed on deep offshore oil production sharing contracts with oil multinationals with generous incentives to the IOCs because of the high cost of deep offshore oil exploration and the relatively new technology required for it.
The incentives were multi-faceted and designed to get the IOCs to sign the agreement. The then contract indicated that the companies would not pay any royalty on any oil that they hit beyond 1000 meters. But for any oil that they hit between 100 and 1000 metres, they would pay certain percentages as royalty. They were also to pay a flat 10 percent royalty for oil found in the inland basin. They were also given other incentives such as a generous splitting of profits, lower petroleum profit tax, and profitable recovery limits.
In 1999, Nigeria also made a law on the sharing contracts so that if crude oil price went up to $20 per barrel, the terms of the sharing contracts would be reviewed to give Nigeria higher percentages, because the oil companies would have reasonably recovered their expenses and Nigeria should get more from the profits. Although oil prices eventually skyrocketed to $90 in 2008, the sharing contracts were never reviewed. The IOCs were reportedly at a time taking 80 percent of oil profits and paying the NNPC 20 percent.
With the new contract signed by Buhari, the oil royalties to be paid to Nigeria by the oil companies have now been reviewed upwards. And the non-payment of royalty for crude oil hit at 1000 metres and beyond has been cancelled. Even with the marginal increases, Nigeria stands to earn an additional $1.4 billion in 2020. I commend the Buhari government for the strong will to sign the contract and urge that it be implemented to the letter. All other such agreements in other sectors that are contrary to Nigeria’s interest should also be reviewed. With more money accruing to the country from this contract, there should be more funds available for infrastructure, especially roads, bridges, schools and hospitals. However, all the areas in which public funds are being frittered away, especially through corruption and our bloated bureaucracy, should be dealt with.
Let more funds be devoted to public infrastructural development, especially our dilapidated roads. The fault, I believe, is in our system, and not in any occupant of the office of Works Minister at any point in time. It will, however, be expedient for the government not to wait until roads totally collapse before issuing multi-billion naira contracts that would take years to execute to repair them. The very bad portions, which Fashola has said are not so many, should be isolated and speedily repaired to ease the country’s road nightmare.
