Bismarck Rewane, the Managing Director of Financial Derivatives Company Limited, has emphasized that concessioning Nigeria’s major roads could play a crucial role in reducing inflation, enhancing productivity, and stabilizing the naira. Speaking on Channels Television’s “Business Morning” program, Rewane highlighted the significance of the Federal Government’s Highway Development and Management Initiative (HDMI), which aims to attract sustainable investment for road infrastructure through Public-Private Partnership (PPP) models.
Rewane explained that by allowing private sector involvement in road infrastructure, the government enables investors to take the lead in building and maintaining roads. This approach is expected to improve road conditions, reduce transportation costs, and decrease post-harvest losses, thereby increasing productivity. He noted that poor road conditions contribute to reduced productivity due to difficulties in transporting goods to markets and significant post-harvest losses.
Addressing the issue of inflation, Rewane stated that it is often caused by persistent price increases due to low productivity and an excessive money supply. He suggested that improving road infrastructure through concessions could tackle the root causes of inflation by enhancing productivity. Better roads would lead to lower transportation costs and reduced price disparities between rural and urban areas.
Rewane also highlighted the correlation between inflation and currency weakness, explaining that higher inflation rates often lead to a weaker and more volatile currency. By reducing inflation through improved infrastructure, the stability and strength of the naira could be enhanced.
Under the proposed concession model, private operators would be granted agreements spanning 25 years to build and maintain roads. These operators would invest significant funds, such as N100 billion or N200 billion, into the infrastructure and employ advanced technologies like drone surveillance and controlled access points to ensure security. Rewane pointed out that such measures would not only improve efficiency but also address security challenges like kidnapping along highways.
Furthermore, Rewane noted that quality infrastructure leads to greater efficiency and lower costs. He provided an example, stating that improved roads could reduce travel time between Benin and Asaba from several hours to just 45 minutes, demonstrating the tangible benefits of such investments.
This perspective highlights the potential of strategic infrastructure development in addressing economic challenges, emphasizing the need for collaborative efforts between the government and private sector to drive sustainable growth and stability in Nigeria’s economy.
