Amid the COVID-19 pandemic, nearly all sectors of Nigeria’s economy are struggling to stay afloat as some have begun downsizing their organizations. Mr. Biodun Otunola, the Chief Executive Officer of the Planet Project Limited, an indigenous transport infrastructure development company, believes that the transportation sector has been worst-hit during the COVID-19 lockdown. In this interview with Gboyega Akinsanmi, Otunola, whose company’s construction arm, conceptualized, designed and executed the Oshodi Transport Interchange, Nigeria’s biggest public transport terminal, within two years, calls on the federal and state governments to invest more in public transportation. Excerpts:
What will be the effects of the COVID-19 pandemic on Nigeria’s public transport system?
To start with, one of the areas that will experience a lot of social interaction is public transport. Although, one of the measures to reducing the spread of the pandemic is social distancing and that’s because experts have widely reported that COVID-19 thrives mostly through person-to-person contact. If you look at the operation of public transport – road, rail and water, the rate of interaction among passengers is extremely high. Lagos, for example, has over nine million people that use public transport on a daily basis. There are over 80 million people in Nigeria that rely on this mode of transportation daily. That means the propensity for the spread of COVID-19 is extremely high. So, there must be a different set of rules to guide public transport. If you ask me, the sector where this virus can spread at the fastest rate, believe it or not, is public transport. The sector has the largest number of people interacting daily, especially during the rush hour.
In the mornings and evenings, all the bus stops are crowded and people are struggling to board buses. However, I must give a lot of credit to the Lagos State and Federal Governments for various guidelines they have put in place. One of the guidelines is that buses can carry only 50 percent of their capacity. In addition, Lagos State fumigated all the bus stops and stations across the state. Generally, enforcement has been encouraging. Not only that, the transport unions, especially the National Union of Road Transport Workers (NURTW), also issued guidelines to their members. The guidelines require the NURTW members to carry only commuters that use facemasks. Also, they cannot carry more than eight passengers per bus instead of 16. All these guidelines are being enforced. Even though it was hellish on May 11 when the lockdown was eased, people are getting more relaxed now.
San Francisco’s BRT, for instance, lost $55 million a month while Brazil’s BRT lost $188 million. Can you quantify what the public transport sector lost to lockdown in five weeks?
It is mind-boggling. Let us look at it this way. Nigeria has over 80 million people that use public transport on a daily basis. If you take the average national fare of N150 per day and multiply it with 80 million passengers, it will give us as much as N3 trillion for the period of five weeks. To be honest, that is a huge amount. So, public transport is one sector that the five-week lockdown really affected. It is not just the transport operators, all the supply chains that are linked to transportation suffered the same consequences. That includes filling stations, mechanics, vulcanisers, spare parts dealers, tyre dealers and the entire chain of the public transport sector. Of course, the whole economy suffered, but the transport sector suffered more because the transport system is the oxygen of the economy. When the transport sector stops, the economy stops.
Of its post-COVID-19 stimulus plan, the US set aside $2 billion for public transport only. In Nigeria, however, there is no such plan for public transport. What will be the consequence of not making such provision in Nigeria?
We are going to have a number of issues. As time goes on, an operator, who is supposed to carry 16 passengers, has been directed to convey only eight because of COVID-19. Somewhere along the line, he incurs revenue loss. Who will pay for the loss? If you look at the US transport system, it is run by operating companies. These companies are asked to run compulsorily during this period. It means that they are going to run without passengers or with fewer passengers. Although, the number of passengers coming out cannot support their operations because a lot of people are at home, they still have to comply with the government’s order to run. However, the government is also providing them support to make up for the revenue loss because the government did not only ask the operating companies to run, it required them to carry only 50 percent of their capacity in line with COVID-19 guidelines. To them, they are in business. In Nigeria, however, we have not taken such measures.
It is something our government should look into. If we do not provide a subsidy for transport operators, they will not fully comply with the COVID- 19 regulations. At the inception, they may comply but they will circumvent or boycott the system later. When they do that, the whole idea of social distancing is thrown out of the window. In other words, the government needs to sit down with the transport operators and provide incentives for them. It does not have to be as huge as what the US provided. When they have some incentives, they will be faithful to the COVID-19 guidelines. Unfortunately, there are no incentives for them. The government has only provided regulations but we all know that regulation alone is not enough. It is important the government sits down with them and works out incentives in order to commit them to social distancing requirements, especially during this pandemic. It is a 90-day thing. If we do the first 90 days, I believe everybody will get used to it. Then, post- COVID-19, we can go back to our normal lives.
Beyond working out incentives for them, in what areas do you expect the government to support the public transport system?
Like I said before, the public transport system is the oxygen of the economy. Sadly enough, the sector is grossly underfunded in Nigeria because it is left entirely to the private sector. At a time like this when we are dealing with the consequence of COVID-19, public transport has to be recognised as one of the sectors that can lead to the explosion of the pandemic if the sector is not properly handled. As a country, our public transport system still needs to be improved. In terms of rolling stocks, we need more buses. Then, we need infrastructure. For a country like Nigeria, we need more investments in our public transport system – waterways, railways. In this country, no city has a functioning railway system. For a population of over 200 million, that is why commuting and daily lives of individuals are very difficult within the cities. At all levels, governments have to invest more in the provision of buses.
That is the quickest way to improve the public transport system. Right now, we need to enforce social distancing in our bus stops. If the infrastructure is not there, how do you ensure that? Lagos can do it now because it has a lot of bus terminals already built. Oshodi is there. Yaba is there. Race Course is there. But in other 35 states where such infrastructures are not available, how are they going to do it? They will have problems. Governments need to see the public transport sector as an essential sector so that all the guidelines put in place to minimise the spread of the pandemic will be easier to enforce. Governments must invest a lot of resources in this area. That is the only way we can stop the spread of COVID-19.
Earlier, you described public transport as the oxygen of the economy. As we approach the post-COVID-19 era, how can the sector revamp the national economy?
Always, the transport sector is the nexus between the economy of the people and the economy of the country. The rate of development of the economy is a function of the rate of development of the transport system. If the transport system is sluggish, the economy will be sluggish. If it takes five weeks to move goods from Lagos to Kano instead of taking one day, then there is a problem. You are not only paying for the wasted time, but also for the unproductivity. So, efficient public transport can help in many ways. First, it helps in bridging the cost of goods and services. In Nigeria today, the cost of transportation accounts for 40 to 50 percent of the cost of goods. For instance, transportation accounts for 50 percent of the factors that determine the price of a lot of things that are produced in the North, especially agricultural produce – tomatoes, pepper, onion, rice or yam.
Let me cite another example. Granite is mostly produced around Abeokuta, Ibadan and Sagamu. If you are buying granite, it will amaze you that the cost of the granite is the same as the cost of transportation. It is as bad as that. That is a huge inefficiency. If we have a railway system that works efficiently, the cost of transportation should be about 10 to 15 percent. That is on one hand. If you look at its impact on the goods and services nationwide, you see the magnitude of this inefficiency. That kind of money can easily be unlocked if we have an efficient railway system. Commendably, the federal government is moving in the right direction in terms of railway system development. For the first time, we have a concerted and focused approach to ensure that the railway system works. We see what they are doing with the Abuja-Kaduna railway and Lagos-Kano railway. Lagos-Ibadan railway will soon be completed. That is a step in the right direction. On the public transport within the cities, an average Nigerian spends 40 to 50 percent of his income on transportation, especially in Lagos. The lowest earners are the ones that live in the farthest areas. For example, people live in Ikorodu but work in Victoria Island with a monthly salary of N50,000 as drivers and security guards. From Ikorodu to Victoria Island, they spend as much as N25,000 in a month. If half of their earnings go into transportation, what do they have left to participate in the economy? That affects their purchasing power. That affects their disposable incomes.
That also affects the economy. In the West, transportation is taken as a social service. So, governments invest in it and subsidise it. It is one way of subsidising every citizen because it is not necessary you own a car. Let me tell you another problem we have today. An average graduate first thinks of purchasing a car once he starts working. Cars are items that are perishable and disposable. In the West, the first thing an average graduate wants to purchase is a house because public transport is there. So, he does not have to worry about transportation. He will invest his own money on assets that will appreciate in the future. If he buys a house or takes a mortgage, that house will appreciate. With it, he can take a short loan. So, he is wealthier. But the first thing his counterpart in Nigeria wants to own is a car. That car is a liability in the first two or three years. He spends money fueling the car. He spends money servicing the car. He spends money on maintaining the car. So, all his money goes down the drain. That is why many people are poor. It is a big problem that the government needs to urgently address. This is the time to redirect our economy and focus on things that affect the masses. Public transport is one area we have to address.
If young graduates do not have worries about transportation, they will invest their money in purchasing houses. If they think of owning their own houses, that means construction. For instance, we are producing 1,000 graduates every year. Let us assume that 500 of the graduates decide to buy their own houses. If you look at the impact of 500 houses on the construction sector, it is very massive. That is why construction and real estate contribute hugely to the US economy because there is a demand for houses and people do not have to worry too much about transportation. In Europe, it is the same. But here, everybody struggles to buy a car. Once you buy a car, it becomes your perpetual liability.
In the transport sector, what should be the investment priority of the government?
To be honest, the first priority of the government should be the infrastructure. Our governments need to invest in the infrastructure elements of public transport. If you are talking about the bus transport system, for instance, governments need to invest in depots, terminals, or bus stops while the private sector can invest in buses in a public-private partnership (PPP). In the railway, governments need to invest both in the infrastructure and rolling stock. The railway is capital-intensive. So, it is not what individuals can readily go into. It is a government-to-government kind of transaction. It is important governments at different levels invest their money if they want to solve this problem. Also, we have said that Nigeria needs a national transport policy. Right now, most policies we have are not addressing our transportation issues.
For instance, there is no reason a city with at least a population of one million should lack a bus rapid transit (BRT) system. The federal government can invest in the feasibility study and master script. At the end of the day, everybody is a Nigerian. We can begin to come up with a global template for all cities in Nigeria. This can be done at the federal level. The Federal Ministry of Transportation can coordinate it and share data with them through the Nigerian Governors Forum (NGF). This is one of the things that the federal government needs to do. A lot of the states do not have the capacity. But Lagos has enormous capacity in this area. We can see the result. It developed the first BRT in Africa. The second one is underway.
Do you think the post-COVID era will present fresh challenges to the transport sector?
Like other sectors, public transport will face its own challenges. One of the challenges is how we manage social distancing between passengers and the economic impact of that for the transport operators at large. It means fewer people will board buses and available buses will operate at 50% capacity. Currently, one of the operators in Lagos has cancelled its short-term ticket. So, they are not issuing the N200 ticket again. They are only issuing N300 ticket, which is a big issue for the passengers. In specific terms, the operators are now transferring the cost to the passengers. The sector will be heavily impacted, especially the passenger-driven side of the cost for urban transportation. It will cost some money for them to maintain the spacing requirements.
Who will pay this money? That is another critical issue that needs to be looked at. The issue of regulation is also there. Because of COVID-19, public transport generally will come under scrutiny. That is one area we have the agglomeration of people at bus stops, stations, and at different spots. As a consequence, the government will beam a searchlight on the public transport sector and regulate it more than ever before. Regulation and compliance always involve money. So, the operators will have to spend more money. Where will they get this revenue? It is either they are going to transfer the cost to the passengers, which means people are going to get poorer or the government steps in to assist the operators and passengers to ease the burden.