House Rents, Transport Fares And The Meaning Of Despair By Nasir Ahmad El- Rufai

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.

Nasir Ahmad El-Rufai
+234 803 408 2353
elrufai@aol.com

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