EL-RUFAI ON FRIDAY House Rents, Transport Fares and the Meaning of Despair
Just when you think President Goodluck Jonathan
should have finished settling his political debts to enable him
focus on easing the hardships that most Nigerians face simply to
remain alive, the man decides that the welfare of Nigerians and job
creation are not his priorities. How else can one explain his plan
to spend a staggering N2.4 trillion to run government in 2013?
Actually, the question should be: Which government?
Broadly speaking, the major functions of government
include protecting the state from external aggression, provision of
stable legal and social frameworks, delivery of public goods and
services, redistributing incomes where needed and stabilizing the
economy. Going by that definition, one can safely conclude that
Nigeria has no government, despite planning to spend an outrageous
N2.4 trillion
– the equivalent of some $15bn on itself next year. This is against
the backdrop that this year’s budget has barely achieved 30%
implementation. In essence, Nigeria is spending 70% of its income on
about one million government officials that can only achieve 30% of
annually-set budgetary targets.
The absence of social infrastructure is particularly
glaring, since this is an aspect that can help create part of the
three million new jobs that Nigeria needs annually just to clear the
backlog of the rising unemployment. And nowhere is the absence of
government more manifest than in the provision of public goods and
services, especially in housing and transportation. Thus, even with
the new minimum wage, house rents and transportation costs consume
about 80 per cent or more of average household incomes in Nigeria.
Across Nigeria, the massive shortage of housing and transport infrastructure mean that in addition to rising food costs (which our government has denied), many Nigerian families spend most of their income on accommodation and transportation. What would be left for other essentials of life? What about healthcare, education, clothing and other basic essentials? It is no wonder that Nigeria remains in the list of top 15 places with the highest incidence of poverty, with over 112 million out of our 162 million people living below the absolute poverty threshold in 2011. It is sad that one of the top crude oil and gas exporters is now ranked the 25th poorest country in the world. Incidentally, there is nothing new about these figures. What is painfully obvious is that government does not have the right statistics of housing deficits in Nigeria, nor a workable transport sector development strategy under implementation. For example, the Federal Mortgage Bank of Nigeria, recently said the Federal Government would require more than N56 trillion to provide 16 million housing units to bridge the housing deficit in the country. However, assuming that each household has an average of 6 residents, it means that 96 million Nigerians are homeless. That does not sound intuitively accurate.
Another related agency, the Federal Housing Authority
of Nigeria (FHA) which has the statutory responsibility of providing
housing for Nigerians has only built about 40, 000 houses nationwide
since its inception in 1973. This, according to the FHA, has
resulted in a deficit of about 25 million houses in the national
housing scheme, suggesting that about 150 million Nigerians out of
about 162 million in 2011, are homeless
– even more far-fetched!.
Which figures do we work with, 16 or 25 million? The figures do not
add up!
In order to facilitate the sales of federal
government houses in Abuja, we initiated a pilot mortgage which
enabled many public servants and other citizens to buy houses.
Unfortunately, the plan to mainstream the system nationally was
truncated by our successors-in-office. This is why today, the only
hope honest Nigerians have of owning homes is through the
traditional and tortuous method
– self-purchase and direct labour from life savings which is
herculean since only a few people can own houses through legitimate
sources. Now that this year’s
flooding has destroyed thousands of homes across Nigeria, more
Nigerians have been made homeless.
Apart from the massive housing deficits and the
exorbitant rents Nigerians are forced to pay, rising costs of
transportation occasioned by abysmal infrastructure in the sector is
also consuming significant portion of household and personal incomes
in the country.
Transportation is critical for economic growth in
every country, but due to our poor transportation infrastructure,
logistic costs for our goods and services are now typically more
than 20 per cent of sales from the global average of 2 per cent. In
Nigeria, transport costs alone can be as high as 15 per cent of the
costs of goods or services.
Statistics indicate that for many growing economies,
the value added by transportation to the economy accounts for 3 to 8
per cent of GDP while employment in transport sector ranges between
2.5 and 11.5 per cent of total paid employment. But in this year’s
budget, government earmarked only 6 per cent to the Works, Transport
and Aviation ministries combined, without any clear policy to get
the private sector incentivized to invest more in the sector. For a
struggling economy like Nigeria, intensified investment in transport
will not only increase disposable incomes for millions of Nigerians,
but also create millions of jobs and stimulate critical sectors of
the economy.
In addition, an effective transportation system can
have direct and significant effect on the daily lives of our people.
Properly targeted and managed investments in transport facilities
will mean efficient travel that could save time, fuel and reduce
pollution. Lives will be saved and there will be fewer delays and
hassles for the average Nigerian.
Efficient highways, rail systems, airlines, airports,
harbours, and waterways will not only provide the backbone to grow
our economy by moving people and goods around seamlessly, cheaply
and safely, it can also employ millions of workers to generate
substantial share of economic output in the country. If well
exploited, transportation can actually contribute in excess of 10
per cent of our total domestic product annually.
Most Nigerians travel by road because we do not have
a functional railway system and air travel is beyond the reach of
most (though the fear of our skies has also driven more people back
to our death traps on the ground). This has further compounded an
already appalling situation. The state of our roads is distressing
because of the level of deterioration, volume of traffic and the
countless number of fatalities every day. At the moment, only about
15% of our roads are paved and of this, only about 28% can be easily
used by motorists.
The excessive number of federal roads which have
overstretched available resources and project management capacity of
the government are largely responsible for their long construction
periods and poor maintenance of existing roads. Yet every Wednesday,
the Federal Executive Council awards more roads contracts that
cannot be completed, while the legislature introduces more and more
federal roads as
‘constituency projects’.
There is certainly the compelling need to
rehabilitate our road networks and invest in road widening schemes
to increase capacity through increased total lane length. Compared
to the Republic of South Africa which has a population density of
about 40 persons per square kilometre, with a total road network of
about 754,000 kilometres that are well maintained, Nigeria with a
population density of about 150 per square kilometre has only
108,000 kilometres of poorly maintained roads, most of which are
unpaved. This year’s
flooding has washed away important roads, including major arteries,
leaving tens of thousands of travellers stranded and communities
disconnected.
Why is it that despite having about 8,600km of
waterways, Nigeria has been unable to put them to meaningful use? It
is worth stating that effective inland water transportation has the
potential to make commerce more competitive and our economy more
vibrant.
Well structured, the aviation sector can be a key
growth engine for our economy. An efficient and modernized aviation
sector, with regulations and incentives for the private sector to
thrive can make air travel an essential form of transportation,
create jobs and economic growth. Nigeria needs to leverage on
transport infrastructure development urgently to eliminate the
avoidable logistic costs that are up to 50 per cent higher than what
is normal for operations in all spheres of our economy. Such a
programme would create millions of jobs and open up the entire
country to rapid economic and social development.
Government must live up to its responsibility of
developing and implementing policies that would strengthen primary
mortgage institutions while simultaneously embarking on social
housing projects across the length and breadth of Nigeria. It must
also invest heavily in public transportation systems like roads,
railways, aviation and inland waterways systems. That way, apart
from providing urgently needed social infrastructure, the processes
involved would create millions of jobs in Nigeria, promote house
ownership for families and facilitate the emergence of a middle
class which would in turn form the basis of economic development,
security and political stability. Why is government yet to find creative solutions to develop this vital economic artery? Why can’t we find ways to innovatively leverage the three trillion naira pension funds sitting quietly in banks, the sovereign wealth fund and whatever is left of the depleted excess crude account to address these critical infrastructure deficits? For now, it remains a tale of despair for majority of Nigerians who go to bed thinking of landlords, estate agents and house rents, with the voice of rickety bus conductors still ringing in their ears, “no change!” Paradoxically, what most Nigerians want and deserve is just that: Change. |