Nigeria's misplaced priority in infrastructural development

The governor of Lagos State, Akinwunmi Ambode, is reinventing existing infrastructures in the state. Already noted for fanciful ideas, he is making the lay-by along some major roads more eye-catching. Like he is doing around the city, barbwire fences have been installed at the foot of the Third Mainland Bridge at Oworonshoki, to force the use of the available pedestrian overhead bridge. Officers of the state's transport management authority are positioned at the lay-by to ensure motorists use it. But without assurance that these measures are enough to improve compliance, a mobile police unit is also on hand.

In Lagos, investments in infrastructure necessitate further investments in order to ensure proper use. A few years ago, road infrastructure in the Abuja metropolis was face-lifted with rampant speed-breakers, ostensibly to ensure motorists obey speed limits. Even without these bells and whistles, the cost of one kilometre of paved road in Nigeria often exceeds, by wide margins, the upper bound of global average, according to World Bank data. This indicates the negative incentive for government to embark on infrastructure projects.

This merely introduces some of the many issues on both the demand and supply sides of infrastructure development in urban Nigeria. Middle-class Nigerians drive on pedestrian sidewalks. It is common to see people unburden themselves on the road, the rail tracks, or into the gutter, or in the river from the top of the bridge. Part of the perks government officials enjoy is driving noisily on the wrong side of the road.

In spite of the abuses of the existing transport infrastructure, the country is pushing for more infrastructure, nonetheless. The National Integrated Infrastructure Masterplan (NIIMP) stipulates the need for the country to invest $33 billion (N10 trillion) in infrastructure annually, for 30 years; beginning from 2014. However, the capital expenditure in the 2015 budget was N557 billion. President Muhammadu Buhari served the notion of creating his own infrastructural boondoggles in the 2016 budget by allocating a whopping N1.8 trillion to capital expenditure. But with capital releases still below 25% in September, infrastructure spend in 2016 is bound to miss the target by a wide margin.

The entire federal capital investment plan for this year is meant to be funded by borrowing from both domestic and foreign sources, in almost equal halves. Not only do we lack the money for our discreditable infrastructural quests, we also don't have the required technologies, materials and skilled labour. The expertise to development projects for bankability is also very lacking locally.

Nigeria-type nothingness has never led any country to significant advances in infrastructural development. China acquired the technology, generated the funding and developed the manpower that have continued to deliver its impressive infrastructures. Leaders of the United Arab Emirates demonstrated strategic foresight by instituting the Abu Dhabi Investment Authority in 1976. With its annualised 20year rate of return at 6.5% in 2015, ADIA sovereign wealth fund, which had $792 billion in assets under management (as at June 2016), will generate $51 billion this year. That is more than two and half times Nigeria's 2016 budget of N6.08 trillion ($20 billion), which we cannot fund.

For Nigeria, infrastructure projects constitute significant capital drain. Because of weak supply of expert local labour and high capital requirements for the projects, only a sizeable number of local jobs can be generated with the big projects. For these two reasons, America's “New Deal” – which entailed massive investments in infrastructure and public works across the country, following the Great Depression of the early 1930s – is a wrong model for reflating the Nigerian economy currently in a recession. Much of the funds for Nigerian capital investments typically end up in foreign countries, because of very weak local inputs in road and rail projects.

It is, therefore, awkward that at a time the foreign exchange revenue of the government (from oil) was at a record-low, and the local currency under sustained pressure from divestment of foreign portfolio investments, the Buhari administration made a high stake on infrastructure investment. But not only did the construction industry contract by 6.3% in Q2 2016, net job growth was also negative. We see yet again the impracticality of governments' infrastructure development pledges.

The straw man says the absence of infrastructure has been crippling our agro economy. But an evidence-based analysis by the World Bank in 2015 proves that post-harvest losses are less for farmers with post-primary education, compared with less educated farmers, in the six sub Saharan African countries surveyed.

There is a more assured pathway to development than betting on well-paved roads and good rail system. For a country, good transport system is a mark of development and not a means to attaining development. The journey to Nigerian economic transformation has to start now with massive investment in education. We have to be serious and desperate in acquiring science and technology education, and instituting a culture of research and development. We must also be deliberate in connecting knowledge development to our SMEs in the growth sectors, including agriculture, food processing, product manufacturing, financial services, ICT and entertainment.

For sure, we need infrastructure to support growth in the SME sector and the broader economy. But we have to develop the know-how to deliver the projects. A gratuitous technology transfer will not happen, and we don't have the money to procure our infrastructure needs from foreign entities. By hook or by crook, Europe used its technological know-how to deliver its infrastructure. Available local expertise and skilled labour made the Marshall Plan wellappointed for Europe. China is using education to develop capacity to adopt or steal technologies for its development.

Education is the bedrock of sustainable economic growth and development; not infrastructure. An enlightened society will seek true transformation. If the next generation of Nigerian farmers are better educated, they will do all that is necessary to reduce the current high level of losses during and after harvesting their produce.

But there are hurdles we must scale for us to transform to a knowledge society and a knowledge economy. One, our politicians would have to rate education higher than paved roads. Two, we have to prioritise a future Nigeria. Three, we have to be diligent with the implementation of this education-for-development policy.

The crash in the price of oil has put a wedge to our economic rollercoaster. We have to now plan a new knowledge economy, whereby our infrastructures will be representative of our technological development; not that they would even be too sophisticated for proper use by much of our urban dwellers.