The Honourable Minister of Finance and the coordinating minister of the economy earlier today led a a meeting with concessionaires under the Highway Development and Initiative (HDMI) of the federal government to unlock road infrastructure investments estimated at over N1.5 trillion. The meeting was held in the context of the government’s reforms and drive towards expanding private sector investment in Nigeria.
Though most of the concession agreements were concluded between 2021 and 2022, it is only the concessionaire of the Benin – Asaba road that have moved to site and started work, after the flagging off ceremony last month. This meeting was therefore to unscrew remaining nuts in the other concessions so the concessionaires can move to sites.
The Minister, speaking at the start of the meeting, shared that “within the context of current macroeconomic stability, the inputs, participation, and expertise of the private sector comes to the fore.” The Minister recalled that at the recent IMF / World Bank Spring Meeting, the administration was commended and recognised by both the Bretton Wood institutions and investors on macroeconomic stability. However, the government is now focused economic growth, jobs and improving the standard of living of Nigerians.”
The Minister argued that “having achieved resilience and minimized the price pressures on goods and services, and exchange rates, the economic growth of 3.46 percent, though encouraging is not enough to lift millions out of poverty. The government is committed to growing at a faster rate to lift Nigerians out of poverty in millions.”
The Minister also spoke about the recent lower oil prices. He said, though Nigeria is not directly affected by the proposed tariff measures of the US government, we are indirectly affected by the effects on crude oil prices. Against this background and as part of the government’s economic strategy of a private sector led growth, HDMI is critical.
For all the concessionaires present, including Kola Karim, the Chairman of Shoreline, and the concessioner of the Benin – Asaba road, their major request at the meeting was for the addendum to the agreements reached to be signed by the government. Other knotty issues include dealing with existing contractual issues on the roads, and agreement on phases of each road concession.
Wale Edun stressed that it is important for the government and the concessioners to reach agreement on the roads to increase productivity by reducing the journey times on the road. For instance, the Benin – Asaba road, when completed, will reduce the journey time by 75 percent. Eight other concessions will have the same treatment and accommodation covering an estimated 1,000 klm under the regulatory supervision of the Infrastructure Concession Regulatory Commission (ICRC).
The Minister of Works, Senator David Umahi joined the meeting from Lagos where he is with some other potential investors on road infrastructure. He welcomed additional interest under the HDMI, with HDMI 2 set for launch. He requested that the investors tidy up arrangements, including guarantees and proof of funds “so that the government is sure that there is immediate mobilization to site after the addendum is signed.”
The Minister for budget and planning, Senator Abubakar Atiku Bagudu says “this is no doubt an important milestone. The government is determined to support the private sector.” The Director General of ICRC, Dr. Jobson Oseodion Ewalefoh, says the agency is “here to speak to investors committed to seeing these through as demonstrated by the Benin – Asaba road.” He added, “government is about public trust, and this is to ensure that the private sector participants have the required capacity, expertise, and finance.”
To all the private sector participants at the meeting, their concern is to ensure that they have the right documentation that ensures that the agreements are enforceable. They shared that it has taken long for them to get here and appreciates Edun’s role in trying to get the agreements ready so they can mobilise to sites.
The HDMI, established in 2021, and currently in phase 1 is designed for the concession of major highways in Nigeria for private sector concession, mostly over a 25-year period. The concessioners will rebuild the roads, collect tolls, and return to the federal after the concession period. The roads already concession include the Benin – Asaba, for which work has commenced, Abuja – Lokoja, Onitsha – Owerri – Aba, Sagamu – Benin, Abuja – Keffi – Akwanga, and Kano – Shuari.
