The concession of Nigeria’s main roadways, which are in terrible shape, will eventually lower inflation, boost productivity, and fortify the country’s faltering currency, the Naira, according to Bismarck Rewane, Managing Director of Financial Derivatives Company Limited.
The economist added that there would be fewer kidnappings, which have become a troubling phenomenon near the country’s highways.
He made this claim during a media interview on Monday.
Rewane is a part of the Federal Government’s Highway Development and Management Initiative (HDMI), which uses a Public-Private Partnership (PPP) model to draw in sustainable funding and investment for the development of road infrastructure and asset management along federal highway corridors.
He claimed that the programme was the government’s approach to clearing the path for funding from the private sector.
Rewane promised to decrease kidnapping, which has become a troubling phenomenon along the country’s roadways.
He said, “Kidnapping is low; productivity is increasing; the cost of transportation reflects in the prices of goods. So, you would now see the prices of goods begin to come down.
“Inflation is defined as the persistent increase in prices because of low productivity and an increase in money supply. So, we can take out the money supply by using the MPR (Monetary Policy Rate) and the central bank, but the persistent cause of inflation in the country is a reduction in productivity.
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“Why is productivity reduced? Because when goods are produced, they cannot get to the market, and there are post-harvest losses.”
Rewane said under the arrangement, private sector operators are given concession agreements for 25 years. “He builds the road, maintains it for 25 years, and he gives a percentage of his toll back to the Federal Government of Nigeria, and, in some cases, the states,” he said.
He said the maintenance costs of roads would go down to the benefit of the Federal Government and sub-nationals.
“When you cede the road to somebody that spends maybe N100bn or N200bn and guards it with drone technology, central reservation and high barriers, with only three or four outlets to get out of the way, it means that you cannot be kidnapped.
“When a road is well-built and well-maintained, you will enjoy greater efficiency and lower cost,” the economist said.
“The cost of transportation reduces sharply, and this is coinciding with the reduction in the price of petrol,” he said, adding that goods would get to their destinations faster.
“The records are there; the evidence is clear that because I can get to my location faster, I would rather pay N1,000 or N500 to get there and come back and turn around.
“Right now, it takes three to four hours to get to Asaba from Benin, but it is now going to come down to 45 minutes.”
