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‘Third Mainland Bridge Closure Costs Nigerians over N40bn’

14 Nov 2012

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Mr. Bismarck Rewane 

Nnamdi Duru
 
The Managing Director/Chief Executive Officer of Financial Derivatives Company Limited, Mr. Bismarck Rewane, has put the total cost of the closure of the Third Mainland Bridge  to Nigerians at between N40billion and  N45 billion. The cost represented between N39 billion and N44 billion higher than the N1 billion spent on the repair work by the Federal Government.

Rewane stated this while addressing participants at a one-day stakeholders’ forum on Nigeria’s pension system with theme: “Investing Pension Funds for Economic Development” in Lagos.

Speaking on “Importance of Long Term Funds for Economic Development”, Rewane noted that while the Federal Government put the cost of the bridge rehabilitation project at N1 billion, the aggregate cost of the project to Nigerians ranged between N40 billion and N45 billion.

According to him, “going by the average number of cars plying the bridge on daily basis and each car carries three passengers and as a result of the diversion, an average car spent three extra hours in traffic daily.
When you aggregate the above and other associated costs, the true cost of the closure according to him, ranged between N40 billion and N45 billion.

“The true cost of the closure of the 3rd mainland bridge is between N40 billion and N45 billion. The minister said the cost of the project to government was N1 billion but when you consider the cost of the chaos it caused, the crying of the people, the accidents and crimes caused by the closure as well as the man hours lost during the closure the coast would be as high as that,” he said.

Rewane urged people in government not to shy away from borrowing to finance development projects across the country, saying it was the only way forward for the nation.

He noted that a nation could either save enough resources to fund its development projects or borrow funds to do so, emphasising that since Nigeria could not save the resources it needs to fund its development, the country has no other option than to borrow to finance development projects across the nation.

Rewane dismissed the argument that corruption was widespread in the economy, asking if it was better for the country to stop corruption by remaining under-developed.

“Nigerians are averse to borrowing but it is inevitable. That corruption has persisted does not mean we should remain perpetually in under-development. We cannot save our way to development but we can borrow our way to development,” he stressed.

Meanwhile, the Director-General of the National Pension Commission (PenCom), Mr. Muhammad Ahmad, has underscored the importance of long-term assets in the economy, saying it impacted positively on economic development by generating an increase in domestic savings and investment as well as helping to deepen the capital market.

Long-term fund, according to him, helped to deepen the capital market and reduce the cost of capital and facilitates the development of yield curve within the fixed income segment of the market.

He also noted that long-term assets promotes strong corporate governance by ensuring improved disclosure and protection of minority shareholders’ interests, providing a counter-balance to controlling shareholders and helps to create legal reforms and improvement of oversight on companies among other things.

Ahmad also highlighted some of the challenges facing the availability of long-term assets including lack of public awareness and low financial literary, macro-economic instability and fluctuations in inflation, interest and exchange rates as well as over domination of the banking sector in Nigeria among other things.

According to him, pension funds act as intermediaries into a lot of financial assets including corporate equities and government bonds and provides long-term financial intermediation to real sector through corporate debt instruments and investment funds.

Tags: Business, Nigeria, Featured, FMDA

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