Thursday, December 03, 2015 09:15AM / FBNQuest Research
When compared to its West African peers, Nigeria’s infrastructure networks compare favourably. However, the condition of its transport network is poor. This has impaired national connectivity.
Industry sources suggest that the road network carries not less than 90% of domestic passengers and freight. Industry sources suggest that about 15.2% of the total road network (30,000 km) is located in the urban areas. The latest national accounts from the NBS show that the transport sector contracted by -4% y/y in Q3 2015.
Road was the greatest contributor to transportation in the third quarter accounting for 85%; air transport accounted for 8%.
The road network in Nigeria is currently estimated to be 197,000 km, about 18% of it paved. According to the Lagos Metropolitan Area Transport Authority (LAMATA), there are over 200 vehicles to every kilometer. This is significantly above the national average of 11 vehicles to every kilometer of pliable road.
As for the railway segment which is close to non-existent, the Africa Development Bank through its “Infrastructure Action Plan for Nigeria” report disclosed that the national rail network consists of 4,332km of track and is characterised by sharp curves and steep gradients in many sections. Only 30km of the track is in the form of double track and all of that is in the Lagos area.
Due to the country’s poor road networks and derelict railway system, air transportation is widely used. Lagos and Abuja usually register the highest number of passengers and are also the favourite destination spots for domestic travels.
Port infrastructure has experienced significant improvements in recent years. However, the two most significant ports are still located in Lagos (Apapa and Tin Can Island Port). Apapa Container Terminal is West Africa’s largest container terminal.
Earlier this year, it was made public that the funding for Nigeria’s US$1.5bn Lekki port has been approved. The port is likely to begin operations in Q3 2016 and will be part of the Lagos Free Trade Zone.
The FGN recently revealed plans to set up a US$25bn infrastructure fund to bridge the funding gap in infrastructure development. The infrastructure gap is wide; the most significant gaps can be seen in power, housing and broadband penetration.
While the FG’s plans are laudable, the US$25bn figure is a fraction of the US$100bn deficit estimate according industry sources.