The Problem Statement
It is no longer news that Nigerian roads are unmotorable. The poorest condition of national roads are roads under the control of the Federal Government, known as “Federal roads”.
The condition of the roads has resulted in the loss of lives and shortened the lifetime of vehicles/cars through repeated accidents.
This bill requires the fund to resolve insufficient levels of funding and inconsistent allocations from the Federal Road Management Authority, rendering maintenance preparation challenging and irresponsive to the growth of the private sector.
Stakeholders have argued that ordinary Nigerians will be further be impoverished by the bill as the road users will possibly pass the cost to the people.
A few legislators have argued that the bill would intensify the problems Nigerians were already facing.
The Policy solution
The National Roads Fund (Establishment) Bill 2019 is meant to finance the maintenance and rehabilitation of national roads as a policy response.
The bill was sponsored jointly by Hon. Dr. Ossai Nicholas Ossai, Delta State PDP Representative Member, and Hon. Okechukwu Tobi, Member of the PDP representing Enugu State.
The Bill made its first reading on 9 October 2019, second reading on 5 November 2019, and third reading on 30 January 2020.
Following a series of legislative reviews, the National Roads Fund (Establishment) Bill 2019 was passed by the 8th National Assembly and sent for assent to the President, Muhammadu Buhari.
Nine sources of revenue were suggested by the sponsors of the bill.
Firstly, the road fund will include international transit charges for vehicles and axle load control charges.
Secondly, the revenue source will come from a 0.5 per cent deductible inter-state mass transit usage fee from the fare charged by travellers to private mass transit operators on interstate highways.
Thirdly, for any amount of petrol and diesel products imported into Nigeria and for locally produced petroleum products, the fuel levy of N5 is paid per litre.
Finally, on any federal road designated as a toll road, revenue will be derived from a toll fee of a percentage not exceeding 10 per cent of any income charged as a user fee per car.
When signed into law, the Bill would exclude roads with a Public-Private Partnership (PPP) deal from the toll tax.
It will also exempt the National Roads Fund, relying on Section 80(1) of the 1999 Constitution (as amended), from the Consolidated Revenue Fund and the Treasury Single Account.
In addition, the governing board, the tenure of the members’ office, as well as the membership allowances and the termination of membership will be set up.
The bill will establish a road programme, tax exemptions, offences and penalties, as well as various issues, such as regulations and the minister’s power to give orders, and the role of the National Privatization Council.
However, Mr. President, who expressed some reservations, declined to agree to the Bill.
It is hoped that the 9th National Assembly will liaise with the presidency to further examine the issues raised, in particular the duplication of roles with other similar agencies as well as its working structure for the benefit of the citizens of Nigeria.
NIGAC Constructive Position/Take
Despite the fact that both Federal roads and State roads are in a sorry state, the National Roads Fund (Establishment) Bill 2019 is undoubtedly timely and would help fund the rehabilitation and maintenance of motor roads in the country.
It is accepted that inadequate financing for road infrastructure management results in delayed or inadequate road maintenance, which in turn leads to asset failure and contributes to higher construction costs for regular and periodic maintenance.
This represents a big move in the right direction. To drive social change and position the country on the path of sustainable economic growth and development, massive infrastructure development is required.
However, restricting the movement of heavy-duty vehicles, which decreases the life span of motor roads in the country, would be the best policy choice.
Second, scaling up the development and opening of waterways to decongest heavy-load traffic on national roads. Third, international guidelines should be focused on the requirements/equipment for the construction and maintenance of national roads.
It is therefore recommended that sufficient funds in the maintenance and rehabilitation of national roads be budgeted for and released to the already existing government agencies and departments.
The Federal Roads Maintenance Agency (FERMA) should be well suited to fulfil its mandates.
Instead of duplication of functions, the development, financing, maintenance, management and improvement of roads in Nigeria, including road concession contracts and other types, should be used to design a PPP arrangement.
In this way, the burden would shift away from road users in the midst of the current economic challenges.
This would help position the national road network towards economic prosperity to meet the needs of all Nigerians.
It would help attract potential foreign investors, as well as encourage local business to ease the already existing transportation costs and logistics problem in the country.