Izuwah: Infrastructure, Nigeria’s Biggest Challenge

Chidi Izuwah
Chidi Izuwah

The Director General, Infrastructure Concession Regulatory Commission, Mr. Chidi Izuwah, in this interview with Nume Ekeghe, speaks on the federal government’s plan to reduce the country’s infrastructural deficit through public private partnership. Excerpts:

How has it been since you came into office?
It has been very interesting. The biggest challenge I have come across is infrastructure. Until we solve the infrastructure challenge Nigeria faces, we may not be able to deliver the Nigeria of our dreams. One thing that is very important is that all the capital is not available with the government. When you look at our budget, and look at our Gross Domestic Product (GDP), the budget is nearly about 10 per cent of our GDP. So you say to yourself, what else runs the economy? So we require huge infusion of private capital into our infrastructural space.

And that is what ICRC is driving and that is what I have been doing to make sure that we bring more private sector to fund infrastructure. If you recall on 27th of March 2019, the Federal Executive Council (FEC), set up a committee to focus on infrastructure financing and it is a very serious matter. So the ‘NextLevel’ for Nigeria, with President Muhammadu Buhari is infrastructure. Imagine a Nigeria with good roads, good railways, hospitals, and universities – that is the Nigeria of our dream. And the only way we can deliver that dream is to partner with the private sector because there isn’t enough money in the budget to be able to deliver all the things we want. And as we are looking; look at our population, it’s galloping and our needs are growing. So partnering with the private sector through public private partnership (PPP) is one major area and other countries have done it. If you go to Malaysia, Philippines, Australia, Canada, and India, the massive investment they have in infrastructure is done by partnership with the private sector.

So, driving that private sector participation is very key to deliver an infrastructural sufficient Nigeria. And if we do not have an infrastructural sufficient Nigeria, we will not be able to realise and create peace. If you look at the problems in the north-east, it is mainly caused by poverty. But once you have infrastructure, people will get involved in the economy and they are able to generate income. And once they generate income, they will not be interested in troubles. So all these tensions we hear about is all driven around infrastructural development.

Once we have good infrastructure, then the world will come to us. Because we have a large population which transcends to large market, but it will require infrastructure to bring about ease of doing business, which his excellency is driving is around infrastructure. This involves having sufficient power, transportation, schools, hospitals, etc. That’s what infrastructure is all about and that’s what I see as a major goal.

What are the PPP arrangement to help reduce power deficit in Nigeria?

Look at Mambila power station, it is huge! It will produce close to 3,000 megawatts of power; look at Zungeru power project, it is almost completed and that is almost 1,000 megawatts of power to be generated. And then we have all the other large projects happening around the country. Then you look at what transmission is also doing; because one thing is to produce the power, another thing is to move them from one part of the country to the other. Look at what the government is doing about the power sector support fund, which is around the liquidity challenges of the power sector faces, and be able to be able to improve them. Look at the eligible customer intervention. So power is significantly improving, it’s not like the way it used to be before in terms of the volume of power available and what is transmitted. It is not yet perfect, but once there is a will, there will definitely be a way. And you cannot doubt the will of President Muhammadu Buhari, to leave a legacy for Nigerians concerning power, and that effort is on-going.

Still on infrastructure and relating to transportation, what is the update on having a National Carrier?
The national carrier was suspended because of the elections because it is not very easy to attract investors during an election. An election creates investment uncertainty. So, the Minister made it very clear that it is a PPP and we are going to support that effort. Nigeria has 200 million people. Ethiopia has a national carrier, Ivory coast has a national carrier, Namibia of two million people has a national carrier, so why don’t we have a national carrier? If you look at most airlines in the world, why do they come to Nigeria? They are here because they are making money.

So what are we doing? Why they are making money is that we are exporting jobs to them. What is happening in the aviation sector now is not only about the national carrier, there is an entire transformation program for the national aviation sector. There are the airports which are going to be transitioned to make world class, so that they would be about the best in the world. There is the Maintain Repair Overhaul (MRO) facility. We don’t have one in West Africa currently. Many of our airplanes will pay over $1 million to go somewhere to be maintained very often. That maintenance can be done here, and will be able to create jobs.

There is the aviation liaison company, which will make it very easy for our airlines to get single digit support financing, to be able to lease aircrafts. Then there is the national carrier. Let’s just compare our national carrier with Emirates, there wasn’t Emirates in 1985. But here in 2014, Emirates made a revenue of about $22 billion, employed 150,000 people. It is estimated that in another six years, 20 per cent of the GDP of Dubai will come from aviation. What is aviation contribution to our GDP now? It is less than one per cent. Imagine a Nigeria where there is 20 per cent contribution to our GDP from aviation sector, what will that kind of Nigeria be? Emirate is just 150,000 people. Look at our oil industry; in 2014, the revenue we made was about $22 billion, about the same revenue with Emirates. That is just one sector of their economy, they also have oil in Abu-Dabi and some other parts of Emirates. It just tells you how transformational the aviation sector can be.

And in any modern society, one of the measures of productivity is actually the numbers of flights that comes into your capital every day. So you can’t compare ourselves to Paris and other countries. In Nigeria, Abuja and Lagos should be the aviation hub for West Africa. People in Gambia don’t need an airline. What they need to do is to fly to Lagos and take another flight from there to where they are going to. And once you can make Lagos a hub, it will go down well and increase the number of people who are flying. And when that happens, it creates a massive level of opportunities in the entire value chain. Each plane in the aviation sector creates jobs for close to 50 people. And these are high quality jobs.

Hence you can see how transformational having a national carrier would be. That’s what really drives the entire aviation. What is happening now is that, we are contributing money to other countries; we are basically exporting money to other countries. When you fly British Airways, or Emirates who makes money? Definitely not Nigeria. I am not saying I’m against them, but they are making money but why shouldn’t we make same and employ our own pilots. Look at what Nigerian Airways used to be in those days. We need to bring back that feeling to Nigeria.

That sense of pride, that sense of a national carrier. The Egyptians played a football match in Asaba few days ago, who brought them to Nigeria? Egyptian Air! When Nigeria is to play football outside the country, who takes them there? It was a good feeling that we beat Egyptians in the football game, but they beat us in other things. So it is all about national pride. They were very proud of their national carrier waiting for them at the airport to pick them back, so why shouldn’t we build our national pride that would be flying our footballers, president and ministers all around the world? That is what this is all about – national pride, which is very important for all Nigerians.

How is the ICRC supporting the inflow of foreign direct investments in the country?
If you look, the ICRC was the first organisations to create a PPP disclosure portal. So that has created a massive confidence in the investment community that the ICRC process is a transparent process. If you look at that portal, 70 per cent of the traffic is from outside the country. So people want to invest, which is huge. We don’t have an infrastructural problem. And I’ll keep telling people that what you have is an opportunity to invest and make money. Just like what we had in our telecoms, people who invested in the telecoms sector made money. That is why the portfolio investors and all the foreigners are bringing their capital to be able to take massive advantage of all the opportunities in Nigeria.

What major PPP projects should we expect going forward?
The Marina Waterfront would be transformational; we are also looking at Gurara Power Plant’s operations and maintenance; we are looking at education, agriculture, university hostels, roads across every infrastructural sector. But transportation is very key. We have the problem of the port in Lagos now. We are looking at the deep water ports. Lekki deep water ports is coming on, Ibom deep water port and so on. And then you look at railways, so transportation is very key.

Energy is very key also. Social infrastructure in terms of hospitals and creating centres of excellence. If you watch, medical tourism is a $1 billion opportunity in Nigeria of today and we spend about a billion dollars on medical tourism. We have good doctors in Nigeria. Very often, when Nigerians travel abroad who treat them? They are treated by Nigerian doctors, so why can’t we create an excellent medical facility here? That is a major area we are partnering with the private sector so we can be able to create a world class medical facility. So you can see what the priorities are- transportation, which is an economic infrastructure. Then on social infrastructure, hospitals, education facilities and urban infrastructure.

Take a look at Abuja, it has about 72 districts and only five of them are developed in over 30 years. It is becoming like Lagos in terms of overcrowding for those who drive in Abuja. So we need to expand the other district and the only way we can do it us to partner with the private sector. So those are some key areas. And in fact, on 1st of April, we are running an urban infrastructure by PPP delivery workshop with the Federal Capital Development Authority (FCDA), to be able to start bringing in private capital to begin to start developing all these areas in Abuja to create the Abuja of our dreams. Abuja has to be a capital city for the world. And any capital city must have a world class infrastructure. So what I can assure you is that, in line with the president’s NextLevel agenda for infrastructure in Nigeria, and haven appointed me to lead the ICRC, during my tenure, the future for infrastructure in Nigeria is so bright that very soon you will need sun glasses.