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Cablegate: Nigeria Begins to Address Need for Better Roads

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PP RUEHMA RUEHPA
DE RUEHUJA #3076/01 3331621
ZNR UUUUU ZZH
P 291621Z NOV 06
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 7908
INFO RUEHOS/AMCONSUL LAGOS 5620
RUEHZK/ECOWAS COLLECTIVE
RHFMISS/CDR USEUCOM VAIHINGEN GE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RUEAIIA/CIA WASHDC
RUEKDIA/DIA WASHDC

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.

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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.

© Scoop Media

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