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INFO RUEHOS/AMCONSUL LAGOS 5620
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RHFMISS/CDR USEUCOM VAIHINGEN GE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
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UNCLAS SECTION 01 OF 02 ABUJA 003076 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
PASS DOT FOR KEVIN SAMPLE 
 
E.O. 12958: N/A 
TAGS: ECON ELTN NI
SUBJECT: NIGERIA BEGINS TO ADDRESS NEED FOR BETTER ROADS 
 
REF:  ABUJA 3071 
 
¶1. (SBU) Summary.  In late September 2006, the World Bank's Nigeria 
country director pronounced more than 50% of Nigeria's federal roads 
in poor condition.  He said sending a 20-ton truck from Maiduguri to 
Lagos cost more than shipping the same cargo by sea from Lagos to 
Europe.  This high cost of road transport was due in large part to 
Nigeria's lack of road maintenance.  The GON has realized the need 
for urgent road repairs, and President Obasanjo received at least 80 
billion naira for road projects in his 2007 budget, a significant 
increase from the previous year.  The GON's challenge remains 
ensuring the money actually is spent on roads.  End summary. 
 
Much Work Needs To Be Done 
-------------------------- 
 
¶2. (U) In late September 2006, Hafez Ghanem, the World Bank's 
Nigeria country director, pronounced more than 50% of Nigeria's 
federal roads in poor condition.  He said sending a 20-ton truck 
from Maiduguri, in the country's far northeast, to Lagos in the 
southwest, cost 320,000 naira ($2,500) - or more than shipping the 
same cargo by sea from Lagos to Europe.  The high cost of road 
transport was caused in large part by Nigeria's startling lack of 
road maintenance.  In the country's north, for example, road crews 
often consist of nothing more than local villagers filling in 
potholes with sand and brush while hoping for gratuities from 
passing motorists.  There was no large or extensive national road 
rehabilitation plan in effect or on the near horizon, according to 
an expatriate owner of a Nigerian construction company. 
 
¶3. (U) The Nigerian media reported in late November 2006 that 
revenues of bus companies operating on the Lagos-Ore-Benin City 
expressway had fallen up to 50% because of that highway's poor 
condition.  The manager of a Benin City bus company said buses used 
to travel from Benin City to Lagos and back in the same day, but 
that this trip now took two days simply to get from Benin City to 
Lagos.  The company formerly ran up to 25 buses daily to Lagos but 
now considered it an achievement if 10 buses arrived. 
 
¶4. (U) A Lagos newspaper column in late October 2006 titled "The 
Shame of Nigeria's Roads" criticized the government over Nigeria's 
decaying infrastructure and noted, "The state of our roads stands 
out like a sore thumb.  The roads are collapsing" or impassable, and 
nationally, roads are "simply scandalous" while "some parts of the 
east have reportedly become inaccessible by road."  The article also 
commented, "The riddle about [the] state of the roads is that 
although so much has been spent officially on them, yet the 
condition gets worse in many places."   A newspaper opinion piece in 
late November 2006 discussed the recent crash of an ADC airliner 
which killed 96 persons, and noted that if Nigeria's roads were any 
safer than its airlines, Nigerians "would be talking about having a 
choice" between the two forms of travel.  The paper observed, 
however, "As we all know, the roads have equally become highways to 
hell, where carnage and death rage." 
 
Privatization Agency's Assessment 
--------------------------------- 
 
¶5. (U) Nigeria's Bureau of Public Enterprises (BPE) announced in 
late September 2006 that the GON intended to improve the road 
network by involving the private sector in financing and managing 
the road system.  The BPE and the Ministry of Works' Road Sector 
Development Team were working on a road-sector reform plan to 
increase managerial capabilities and to create an institutional, 
legal, and regulatory framework to permit a private-sector role in 
the road sector.  They planned for some sections of federal highways 
to be concessioned off to private contractors for maintenance and 
expansion. 
 
Main Issues in Road Transport in Nigeria 
---------------------------------------- 
 
¶6. (U) The BPE observed that Nigeria's road network suffered from 
inadequate routine as well as periodic maintenance, and the absence 
of emergency maintenance in areas affected by flood, storms, and 
other natural calamities.  The BPE found that a major contributor to 
decaying roads was their use by overloaded trucks, especially during 
the rainy season. 
 
Nigeria's Over-Reliance on Roads 
-------------------------------- 
 
¶7. (U) The BPE concluded that Nigerian commerce's depends almost 
totally on roads.  The nation's railway system was comatose, while 
 
ABUJA 00003076  002 OF 002 
 
 
the country's domestic aviation industry was poorly developed. 
Nigeria's road sector carried more than 90% of the nation's domestic 
passengers and freight, and 90% to 95% of Nigeria's total "transport 
movements" occurred on roads.  Freight and bulk goods were carried 
over long distances by trucks and tractor trailers. 
 
Institutional Problems With Road Management 
------------------------------------------- 
 
¶8. (U) At the federal level, the administrative structures 
responsible for the road system include the National Planning 
Commission, the Ministry of Works and Housing, the Federal Road 
Maintenance Authority (FERMA), the Office of the Presidency's 
Due-Process Unit, the Ministry of Transport; state-level ministries 
of works and housing, and also local governments.  Each agency has 
its own budget.  This multiplicity of uncoordinated agencies and 
budgets impedes the effective use of road funding. 
 
More Money for Roads Is Needed 
------------------------------ 
 
¶9. (U) In July 2006, FERMA chief executive officer Olubunmi Peters 
told the media that because of Nigeria's neglect of its roads, it 
would be necessary to spend 100 billion naira ($781 million) per 
year for six to 10 years to bring Nigerian roads to a level of 
sustainable maintenance.  He also said that because road contractors 
continued to be owed huge debts by the GON, it was now very 
difficult to interest them in doing work for the government. 
 
Funding for Roads Is Boosted 
---------------------------- 
 
¶10. (U) Nigeria increased federal funding for roads over the past 
several years.  The GON approved in its 2005 capital budget about 67 
billion naira for Ministry of Works road projects.  On October 11, 
2006, President Obasanjo told the Assembly that as of August 31, 
2006, the GON had released 52 billion naira ($406 million), or 71%, 
of the 73 billion naira appropriated to build, rehabilitate, and 
repair roads nationwide, and that road projects were in various 
stages of completion.  On October 11, Obasanjo requested and 
received approval for a federal budget of 2.26 trillion naira 
($17.79 billion), an increase of 18.95% over 2006.  His budget 
focused on building and maintaining the country's physical and 
social infrastructures, with its stated top budget priorities 
including roads and highways. 
 
¶11. (U) Obasanjo proposed that for 2007, 191 billion naira 
($1.49 billion) should go to the public-works sector - up 110% from 
the 2006 figure.  He received 17 billion naira for FERMA's 
maintenance of federal highways (although FERMA at that time owed 
debts of about 12 billion naira); 36 billion naira for the 
construction of the long-awaited East-West Road, 328 km across five 
southern states; 21 billion naira to build the Kano-Maiduguri 
divided highway; and 6 billion naira for the Abuja-Lokoja Road. 
(Comment:  The main impetus behind the planned East-West Road is to 
carry out a visible and needed project in the troubled Niger Delta 
and decrease political instability there.  End comment.)  Obasanjo 
received funding for additional road projects nationwide. 
 
Comment 
------- 
 
¶12. (SBU) It is encouraging that the GON finally is addressing the 
need to devote substantial sums to rehabilitate Nigeria's roads. 
Nigeria's government, at all levels, acknowledges that the country's 
most urgent needs include more electric power and improved roads, 
for Nigeria to have some chance of generating economic growth to 
keep up with a rapidly growing population.  The challenge remains to 
ensure that the money allocated for roads is spent as intended.