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Investing in Transport
New funding to improve transport infrastructure
Increasing investment in the transport sector is key to the Nigerian government’s plans to overhaul infrastructure and fit the country to take its place as one of the world’s top 20 economies. The government’s budget for transport has been steadily increasing over the last three years: in 2008, transport’s budgetary allocation was hiked to USD623.9 million, more than seven times the sum allotted in the previous year; in the 2009 budget, transport got USD754.6 million; while in the budget for 2010, transport is to receive USD840.8 million.
External partners are essential to the government’s efforts in improving transport infrastructure. The World Bank has provided Nigeria with a USD915 million loan to finance transport projects, along with energy and water initiatives and HIV/AIDS projects. The loan is to be spread out over five years, with USD180 million accessible in 2010. The government is working to encourage the input of private sector operators in the sector: the Infrastructure Concession and Regulatory Commission (ICRC) was set up in 2008 to pursue partnerships with the private sector in infrastructure. Transport projects qualify for pioneer status in the government’s investment framework, so new industries in the sector are eligible for a tax holiday of up to seven years, among other incentives.
Cross-Border Transport Cooperation
Nigeria’s transport infrastructure plays a vital role in linking the country to its neighbours, facilitating trade and regional integration. In June 2010, the governments of Nigeria and Cameroon launched the construction of the Bamendu-Enugu Multinational Highway. The road will stretch for 443 km, connecting Bamendu in Cameroon with Enugu in Nigeria; 240 km will be on the Nigerian side of the border with 203 km in Cameroon. The project is being funded by the African Development Bank (AfDB), which is providing finance of USD161 million, and the World Bank, which has given USD330 million. The Nigerian and Cameroonian governments will each give 10% counterpart funding. The contractor for the highway is Chinese company China Civil Engineering Construction Corporation (CCECC). CCECC is the biggest Chinese construction company operating in Nigeria; it has 56 projects in progress across Nigeria, including road and railway construction, and it has invested more than USD10 billion in its projects in the country.
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