HUMAN CAPITAL IMPLICATIONS OF ROAD SECTOR

RESTRUCTURING

BY

*Emeka Agbasi & **Chris Okoye

*Highways Agency, UK
**Fegno Construct

ABSTRACT

Transportation infrastructure is the backbone of a nation’s economy. The goal of any road transport network is
to provide a safe, reliable and free-flowing system for motorists, other road users and businesses to meet socio-
economic needs and improve competitiveness. Unfortunately and for a number of reasons, a considerable
proportion of the road network in Nigeria does not meet these needs and the poor road condition has severe
ramification on safety, reliability and economic competitiveness.

A number of reform proposals aimed at restructuring the road sector, align delivery operations with best
practice, and mitigate the current undesirable conditions of Nigerian roads have been proposed. The end goal
is to provide the crucial socio-economic growth conditions required for the overall development of the country.
The Nigerian Society of Engineers (NSE), Bureau for Public Enterprise (BPE) and the Federal Road Sector
Development Management Team (FRSDMT) have collaborated on initiatives targeted at reforming the road
sector. In essence, these initiatives are intended to institute enabling policy and institutional reforms for
improved service delivery, road management and financing. New institutional framework including legal and
regulatory instrument required to promote Public Private Participation (PPP) in maintenance, financing and
management of national road network has also been produced.

A key output of these reform initiatives is the recommendation to set up the National Road Fund Board (NRFB),
Road Fund (RF), and Federal Roads Authority (FRA) with associated organizational and management
structures. A draft “Road Sector Reform Bill” required for the legislation and setting up of the NRFB, RF, and
FRA have also been developed. It is intended to replicate roads authority at State and Local Government levels

95 Nigerian Society of Engineers International Conference – Abuja 2007

Emeka Agbasi & Chris Okoye

at a later stage after successfully implementing the FRA. These changes will have huge human resources
implications.

This paper discusses the human capital implications for the private sector vis-à-vis the new organisational and
management structures being proposed for the operation of the roads authorities. No strategy for the efficient
and effective implementation of the roads authorities can succeed without a skilled work force. The continuing
shortage of skilled and experienced engineers poses a particular challenge. The role of the Nigerian Society of
Engineers and other engineering institutions, education providers and the industry in meeting this challenge is
highlighted. Short, medium and long term action planning regarding closing the current skills gap and
ensuring long term growth and improving the global competitiveness of the private sector are suggested.

INTRODUCTION As part of the wider transport sector reform, a

Nigeria has recently embarked on a number of recent study on reforming the road sector
significant and far reaching public sector reforms undertaken by the Bureau of Public Enterprises
driven by the National Economic Empowerment (BPE), Federal Road Sector Development
and Development Strategy (NEEDS). NEEDS aims Management Team (FRSDMT) and Nigerian
to restructure the government to make it smaller, Society of Engineers (NSE) has attributed the
stronger, better skilled and more efficient at current state of the nation’s road transport
delivering essential services. infrastructure to lack of efficient and functional
institutional framework. capable of effective
The National Transport Policy is the basis of the management of such a huge and vital national
ongoing reform process taking place in transport infrastructure investment. Consequently, the study
sector. The policy aims to address the social and proposed a new institutional arrangement in the
economic needs of the country and ensures the draft “Road Sector Reform Bills” (1) with the
efficient use of resources and a sustained objective of establishing the National Roads Fund
improvement of the transport’s sector's Board (NRFB), Road Fund (RF), and the Federal
productivity. To ensure the success of this policy, Roads Authority (FRA). Similar recommendations
the Federal Government is proposing to create a are given in a previous road sector reform study
number of agencies and commissions, whose Road Vision 2000 (2) carried out in the late 1990s.
responsibilities include regulation, implementation Experience of several countries in Africa and other
and monitoring of transport sector policies. developed countries has shown that these three
agencies are indispensable for road sector

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Emeka Agbasi & Chris Okoye
development, project implementation, revenue
generation and financing of road maintenance
through user charges. The proposed road sector
reforms will encourage greater private sector
participation in the downstream delivery of road
services and projects It will also create a conducive
legal environment necessary to attract inflow of
private sector resources through concessions and
other Public Private Partnerships (PPP) contract
arrangements. The readiness in terms of capability
and capacity of the private sector to participate in
the delivery of road projects and services needs to
be assessed particularly the human capital
implications.
Road transportation infrastructure
A number of benchmark studies (2,3 & 4) and
practice reviews have been undertaken focussing on
the road sector including existing infrastructure.
Pertinent information from these studies including
background information from the Interim Report (1)
are reflected in this paper. Nigeria with a land area
of 924,000 sq km, has an estimated population of
139.8 million, growing at a rate of 2.7 percent
annually, is the most populous country in Africa
and the largest in West Africa. A fit for purpose
and efficient transportation infrastructure has a
crucial role to play in the socio-economic
development of Nigeria. This is recognised in the
new National Transport Policy against the backdrop
of the National Economic Empowerment and
Development Strategy (NEEDS) and Millennium
97 Nigerian Society of Engineers International Conference – Abuja 2007
Development Goals (MDGs). Nigeria’s transport
infrastructure consists of some 196,000 km of roads
with a road density of 0.2 m per sq km which is
significantly more than the West and Central
African average (0.06 km per sq km), 3,775 km of
railways, 3 international and 34 domestic airports as
well as 13 sea and river ports. The transport sector
is a key component of the economy and contributed
about 2.4 % to real GDP in 2004, with road
transport alone accounting for nearly 86 % of the
transport sector output.
Roads are the dominant mode of transport carrying
more than 90% of cargo and passenger traffic. The
Master Plan for Integrated Transportation
Infrastructure assumes that by 2020 traffic volumes
will be twice as high as in 2000. The average
annual growth rate of passenger transport is
between 1.6% and 2.7%. Undoubtedly, this will put
a huge strain on existing road transport
infrastructure and accentuate the need to reform the
road sector institutions, organisations and
management policy as discussed in the latter section
of this paper.
The estimated value of the road network is 1.85
trillion Naira at 1995 prices. This represents 15%
of the GDP and constituting 95% of the total
investment in all surface transport. The road
network primarily consists of Federal, State and
Local Government roads. As currently provided in
the Constitution of Nigeria, the three levels of
Emeka Agbasi & Chris Okoye
Government have independent responsibilities for
the planning, construction, financing
maintenance of their respective road networks. Of
the total 196,000 km road length, the Federal
Government is responsible for 17%, which are
mainly interstate roads linking State capitals, the
State Governments are in charge of 16%, which
constitute roads and major urban roads, within the
state boundaries. The remaining 67% of the
network is the responsibility of the
Governments which are rural feeder roads and
access roads in rural areas or urban centres when
the Local Governments are located in urban areas.
About 31 percent of the road network are paved
roads (60,070 km). It is estimated that the share of
paved Federal roads is 83%, State roads 49% and
only 10% for the Local Government roads.
present the road transport industries in Nigeria are
characterized by large numbers of small-scale
operators of goods and passenger vehicles.
Transport services in Nigeria are provided by an
estimated fleet of some 3 million vehicles based on
a population estimate by the Federal Roads Safety
Commission and subsequent yearly licenses data till
2005. The number of vehicles increased at an
average annual rate of 17%, from 1.3 million in
2000 to 2.8 million in 2005. The level of
motorization is still low (20 vehicle per 1,000
inhabitants) as in comparable other African
countries such as Ivory Coast (28) and Gabon (100).
98
The general poor condition of the road network
and poses a safety challenge. It is estimated that the
poor road condition contributes to 45% of road
accidents on a yearly basis. The condition rating of
the Federal road network as reported in the former
Federal Ministry of Works (FMW) Medium Term
Strategy 2006 – 2008 gave the length in good, fair
and poor condition as 15%, 45% and 40%. A recent
estimate by the Federal Roads Maintenance Agency
Local (FERMA) indicates that the length of federal roads
in need of rehabilitation at around 30% of the
network length. There is no basis on which to
estimate the rehabilitation needs for state or LGA
roads but it is probably higher than for federal
roads, especially at LGA level. About 3% by length
(250 bridges) of the bridge stock on federal roads
are structurally deficient and found to need
At replacement, the majority of bridges need some
form of maintenance in particular,
repair/replacement of the handrails.
It has been noted that several road sections are
characterized by pavement and structural failures,
due to inadequate programmed routine and periodic
maintenance or total neglect. The generally poor
condition the road network limits year round access
in some cases generate considerable negative
impacts on the economy including inability to
predict the journey time.
Nigerian Society of Engineers International Conference – Abuja 2007
Emeka Agbasi & Chris Okoye
Current practice in Nigeria
Nigeria functions on a three-tier system of
Government, namely the Federal, the
(comprising 36 States and the Capital Abuja), and
the 774 Local Governments. Presently a number of
institutions are responsible for road transport policy
and planning. The National Planning Commission
(NPC) has primary ownership of the core goals and
objectives of the NEEDS and sets
development targets. At the Federal level, the new
Federal Ministry of Transportation (FMT) – a
merger of the former Federal Ministries of Transport,
Aviation, and Works in 2006 - is responsible for
transport policy and regulatory issues for roads, rail,
maritime transport and inland waterways. Currently
all Federal road transport infrastructure activities are
controlled by the FMT and aligned to NEEDS targets.
FMT current responsibilities include administration,
planning and control, development, construction and
maintenance of the Federal roads and their related
facilities. In the case of States, most have merged
the Ministries of Transport and Works in order to
constitute one Ministry that is responsible for all
transport issues of the State. State Economic
Empowerment and Development Strategy (SEEDS)
have been developed by the State Planning
Commissions to complement NEEDS. At the Local
Government level, the Department of Works is
responsible for the management of
government roads.
99
Road construction, rehabilitation and maintenance
is mainly financed out of the capital budgets at the
State Federal, State and Local Government levels. Table
1 below shows the funding profile for Federal
highways capital projects between 1999 and 2007.
The data is represented graphically in Figure 1.
Over the period, there has been consistent under
funding except in 2001.
global
It has not been able to ascertain the spending
justification with respect to output from scheme
appraisal techniques adopted such as cost-benefit
analysis, transport users benefit appraisal, and
scheme objectives. Evidence is yet to be seen of
economic feasibility and prioritisation of projects
prior to the selection of new projects.
Currently, Federal road maintenance is funded
through the budget. At the initial stages of
formation of FERMA (2003-06), only spot
improvements and emergency repairs were
undertaken. In 2007, an amount of =N=13.5 billion
has been allocated to FERMA compared to the
assessed needs of =N=22 billion representing only
61% of requirements. Inadequate funding for road
maintenance is also evident in other countries as
reported in a recent World Bank evaluation report
(5). The report concluded that close to 15 percent
local of the capital invested in main roads had been
eroded for lack of maintenance due to poor funding
in 85 countries that had received Bank assistance
for roads, Consequently, a quarter of the main road
Nigerian Society of Engineers International Conference – Abuja 2007
Emeka Agbasi & Chris Okoye
network is needed to be reconstructed at a cost of
about $45 billion world-wide, while such
investments could have been avoided by spending
$12 billion on maintenance. For every new
kilometre that was built, three kilometre of existing
roads would essentially disappear or be no longer
operable due to lack of maintenance. The cost of
road transport costs increases exponentially with
poor roads, in such a way that for each dollar not
allocated to road maintenance, vehicle operating
costs increase by 2 to 3 dollars.
Data for the Federal road sector appropriations
show that a total expenditure of 1.85 trillion Naira
was provided for the roads sector. Out of this
amount, =N=184 bn was allocated to capital
projects while =N=21 bn was provided to FERMA
for maintenance. It is noted that the Federal roads
appropriation has increased considerably in the past
few years. Its share in GDP of 1.3% is approaching
the benchmark for developing countries of 1.5 –
2%. However, for balanced development the
provision for maintenance is far below the
acceptable benchmark in other countries. The share
of maintenance in total expenditures is only 10%
which is far below the typical range of 30 – 50
percent in other developing countries. Equally, the
share of maintenance expenditures in the GDP is
only 0.13% which falls grossly short of the
benchmark of 0.5 – 1 %.
100 Nigerian Society of Engineers International Conference – Abuja 2007
The procurement and delivery of road works have
gone through changes from dominant and largely
force account seen in the pre-independence Public
Works Department (PWD) to some contracting out
of road maintenance, rehabilitation and
improvement works as seen today. Little progress
has been made in technical governance until
recently. For example the FMW road design
manual and standards specification prepared in
1952 is for the first time undergoing a
comprehensive revision. Road and bridge design
are normally carried out by consultants though there
have been examples of design and construction
where the contractor made the design.
Most major road construction is done by contract;
although the State governments retain a small direct
labour capability, this is usually applied to
maintenance and rehabilitation or the construction
of rural roads. The majority of construction works
are undertaken by international firms registered in
Nigeria, leaving only a small share to local
contractors. For maintenance operations, the ratio
is reversed with a major share to local contractors.
The low capital endowment of the local companies,
coupled with lack of machinery and inefficient use
of their equipment, are some of the factors
favouring the execution of major construction
works by international firms. In the absence of
adequate training and securing of constant cash
flows to the local construction industry, the
problems are likely to remain.
Emeka Agbasi & Chris Okoye
Construction standards are variable. While some
large contractors produce high quality work, others
cut corners with materials not complying with
specification, especially unbound pavement layers.
Smaller contractors lack the skill and equipment to
produce good quality road works. Corruption is
widespread and materials testing frequently
manipulated to disguise sub-standard work.
Construction costs are extremely high, due among
other reasons to the uncertainty of payment.
Until 2002, the former FMW has been responsible
for supervision, monitoring and maintenance of
Federal roads. In 2002, FERMA was created as a
parastatal agency under the former FMW. Its main
role is to carry out regular routine maintenance on
the Federal road network through force account and
contracting out to the private sector. Its resource
are derived from the Federal budget. At State
levels, currently most of the routine maintenance is
carried out through force account under the
supervision of the Ministry of Works’ Civil
Engineering Department. Due to funding
constraints and limited availability of equipment,
only labour intensive maintenance works are
undertaken. There is the general view that the
current structures at Federal, State, and Local
Government levels are not effectively co-ordinated
in the maintenance, rehabilitation and development
of road investment, resulting in duplication and to
some extent, wastage of scarce budgetary resource.
101 Nigerian Society of Engineers International Conference – Abuja 2007
It is important to note that through time, new
construction has always got priority over proper
maintenance and received a small fraction of the
allocated budget, to the detriment of overall road
condition. Road maintenance management often
lacks systematic planning and programming of road
works. Maintenance works were effected on ad hoc
basis and only in response to the poor condition of
particular roads and complaints from the more
influential members of the public. There is a
general absence of a road database that is regularly
updated with condition surveys, traffic surveys or
records of completed work. Except where external
funding was used for projects, economic feasibility
and prioritisation of projects has not been carried
out and the selection of new projects is mostly
politically driven. Despite policy statements at
various occasions to improve the road quality
through enhanced maintenance, the road network
deteriorated further. It simply proved not possible
to secure an adequate and stable flow of
maintenance funds in support of sustainable road
development. A clear maintenance policy: needs
assessment, financing, organisation and
management, never emerged.
Practices in other countries
Differences exist in institutional arrangements,
procurement, financing, management and delivery
of road works and services in developed and
emerging economies. However these differences
are likely to become blurred as practices converge
Emeka Agbasi & Chris Okoye

towards best practices. The ultimate goal being to Agency of the Department for Transport (DfT) is
enhance efficiency and effectiveness of road responsible for safe and reliable operation,
procurement, construction, operation, maintenance maintenance and improvement of England’s
and rehabilitation. The World Bank has been at the motorways and major trunk roads – the country’s
forefront of promoting best practice in the road strategic road network comprising of 7,754 km of
sector. motorways and trunk roads network valued at over
£75 billion. The Agency has annual budget of some
In many developed economies like the US and the £2.3 billion and ongoing major projects with an
UK, the government’s Department of Transport overall value of £12 billion funded either
(DoT) is responsible for policy making with conventionally (budget approach) or through
emphasis on improving safety, journey time public-private partnerships. Roads procurement,
reliability and connectivity, reducing congestion maintenance, and network management services are
and environmental impact and driving efficiency contracted out through framework and Design,
gains in the procurement of road works. In some Build, Finance and Operate (DBFO) type contracts.
countries like the New Zealand, the road agency Local authorities and counties are responsible for
Transit New Zealand manages the roads in the non-trunk roads in their locality. Transport
interest of the users, with considerable Scotland, Transport Scotland, Transport Wales and
independence from the state. A recent report (6) by Northern Ireland Roads Services fulfil similar role
the Royal Academy of Engineering in the UK has as the HA in Scotland, Wales, and Northern Ireland
recommended the creation of a public interest respectively.
corporation – National Roads Corporation (NRC) –
operating at arm’s length from the government but In Sub-Saharan Africa (SSA), most countries are
answerable to the government. The proposed NRC identifying and defining appropriate roles and
will manage, maintain, develop, and charge for the responsibilities of Government, Agency and
use of the national road network. This proposal Deliverer. A number of them still carry out
mirrors the end stage of roads reform as identified maintenance work with a significant share of force
in a study undertaken by Talvitie (7). account. The Road Management Initiative, RMI
Matrix (8), maintained by Sub-Saharan Africa
In the UK, new construction, road works and Transport Policy Program (SSATP), included in this
services and network maintenance are contracted paper shows the policy reform status by country. It
out to the private sector through the road agency. In shows the transport sector performance indicators in
England, the Highways Agency (HA), an Executive 28 SSA countries and measures progress on

102 Nigerian Society of Engineers International Conference – Abuja 2007

Emeka Agbasi & Chris Okoye
implementation of road management and financing
reforms, inspired by the RMI. The RMI Matrix
covers: the status of national transport policy, status
of long term road sector investment program;
structure and performance of road funds which have
emerged in the last 5-10 years; allocation of road
fund resources; progress towards the establishment
of independent road agencies to manage the
network; and current status of road network
condition. 8 out of 28 SSA countries have
established a road agency with a Board, only three
have private majority. Malawi, Mali and Zambia
are relatively advanced in the implementation of
road sector reform.
Road funds have been established at different times
in different countries since the 1950s and 1960s in
OECD countries like the USA, Canada, Japan and
New Zealand. Similar funds have been established
in 1970s and 1980s in some countries in Africa,
Asia and Latin America and recently, during the
nineties in a number of Eastern European countries.
Initial road funds had limited success as they were
primarily designed to safeguard finance for road
maintenance in situations of fiscal stress by
earmarking part of tax revenues. However,
earmarked revenues do not always arrive at their
true destinations. Reasons that were cited for
failure of these road funds were ineffective legal
framework, poor management structures, no
independent auditing and little managerial
accountability. The characteristics of these funds
103 Nigerian Society of Engineers International Conference – Abuja 2007
have been refined over the years to ensure to
address the effectiveness of the funds in meeting the
desired objectives of safeguarding stable financing
for road maintenance and other expenditure. The
‘second generation of road funds’ (SGRFs) are
funded by levies or surcharges designated as user
charges and are identified separately from general
taxation. Revenues from such road user charges are
paid directly into a dedicated Fund managed by a
Road Board whose membership is chosen to
represent users. The Road Board (including but not
dominated by government) determines both level of
charges and the allocation of expenditures under
transparent and accountable conditions. The key
characteristics of the SGRFs is summarized by
Menmaamar, 2006 (9) after Heggie and Vickers,
1998. The results of SGRFs are mixed, but
generally tend to perform better than the traditional
ones.
SSA countries Road Management Initiatives (RMI)
has progressed since 1988 to the current
“commercialisation” to road management
developed during the mid 1990s (10). The
principles are expressed in four “building blocks” -
clarifying responsibility, creating ownership,
ensuring a stable flow of funds, and Strengthening
management. The Sub- Saharan structure address
particular African problems of management, undue
influence, lack of consistency in funds management
and potential corruption involving sub-standard
public works and procurement. Most of the focus is
Emeka Agbasi & Chris Okoye
on establishment of workable Roads Funds and
their administrative structures. This is expedient
where the budget approach has proven insufficient
and inconstant allocations to the sector, the road
fund approach has been adopted by many
developing countries as the only way to try and
secure an adequate and stable flow of funding for
road sustainable maintenance. More than twenty
road funds are in operation in SSA countries.
Nigeria is possibly one of the last countries in the
Region to actually establish a National Roads Fund
although it has proposed the idea since the late
1990s.
Road sector reform proposals
The current road sector reform proposals agreed by
BPE, FRSDMT and NSE follows on from the late
1990s FMW Road Vision 2000 document with an
objective was to bring all national roads into good
or fair condition within 10 years. To achieve this
objective, RV2000 proposed the establishment of a
National Roads Board with responsibility for
maintenance and rehabilitation of the road network
and a Road Fund (principally a fuel levy), which
would be dedicated to road maintenance and
rehabilitation. The Roads Board was to be headed
by a Board with a majority of members from the
private sector. A draft decree was prepared to this
effect but was not promulgated by the then military
government. It is also noted that the RV 2000
proposal failed partly due to lack of political will
and lack of consensus among existing institutions
104 Nigerian Society of Engineers International Conference – Abuja 2007
and lobbying by vested interest to protect their
various organisations.
The key elements and new structure of RV 2000
formulated in the mid-1990s are (11)
• a Federal Roads Authority (FRA), a lean
executive agency managing the federal
network by competitive contracting out to
private companies of almost all the work
required;
• a Roads Fund, fed by taxes and charges on
road users, most particularly a fuel levy, to
cover at least the cost of all types of
maintenance required, and possibly some
other costs of network management and
expansion;
• a Roads Board, with high-level membership
and a small private-sector majority, to
manage the Fund, allocate its resources to
the responsible executing agencies and audit
their use;
• The MoT, assuming policy role and
oversight role, rather than service delivery.
Underpinned by RV 2000 proposal which integrated
the two pillars of road reform (i) institutional and
management structures and (ii) road financing and
road fund, and drawing from lessons learnt from
SSA countries, the current BPE, FRSDMT and NSE
road sector reform proposal has reflected similar
structures in the draft separate “Road Sector Reform
Bills” proposed for setting up a National Road Fund
Emeka Agbasi & Chris Okoye

Board (NRFB), Road Fund (RF), and Federal Roads • That it is not charged with implementation,
Authority (FRA) and an independent sector other than certification and verification of
regulator. application of funds by Federal, State and
Local Authorities
Four key elements of the Draft Bill are: • That it can contract out the role of
1) The establishment of a Road Fund, certification and verification to independent
dedicated to maintenance of roads in engineers and accountants to the private
general; sector, based throughout Nigeria
2) The establishment of a National Roads • That it uses standard templates and
Fund Board (NRB), to administer the Road electronic processing for planning by
Fund and undertake role of certification and Federal, State and Local Authorities.
verification though an effective monitoring • Cutting the levels of the management
and compliance mechanism; hierarchy and over staffing of the institution
3) The establishment of Federal Roads with junior support staff
Authority (FRA); to oversee the • That NRB can hire staff and or consultants
construction, rehabilitation and maintenance on contract basis to meet peak demand
of all Federal roads, and; periods and for special projects
4) Regulation to oversee Public Private
Partnership, as sub-sector legislation for the Unlike the RV 2000 report with proposed NRB that
National Transport Commission (NTC). will only be involved with restoration of the
existing road network, including rehabilitation the
Requisite legal clauses have also incorporated to current NRFB proposed in the Road Sector Reform
ensure enforcement of financial oversights, Bill only strictly addresses periodic and routine
accountability and other aspects of financial and maintenance.
project governance.

A précis of main FRA functions as set out in the

The proposed activities and responsibilities of the proposed Bill are to:
NRFB include; • Deal with all aspects of managing the
• The role of administering the Road Fund Federal ‘ road assets’;
and supporting maintenance program • Enter into road concession contracts and
activities, policy & research other forms of Public Private Partnership

105 Nigerian Society of Engineers International Conference – Abuja 2007

Emeka Agbasi & Chris Okoye
and set guidelines for the working of PPP
contracts;
• Plan and manage the development of road
safety technical designs and standards, in
addition, advise the Inspector General of
Police or the roads agencies, as the case may
be, on appropriate and effective methods of
enforcing road traffic legislation for the
purposes of preventing damage to Roads and
promoting road safety;
• Plan and develop strategies towards
ensuring efficient and effective movement of
traffic on the national road network and
ensure their implementation;
• Monitor the operations, ensure compliance
with and to investigate activities undertaken
by any road agency in the maintenance,
rehabilitation and development of roads;
• Ensure that all tenders for the maintenance,
rehabilitation and development of roads are
conducted through open and competitive
bidding, in a transparent and fair manner;
• Maintain a program of technical assistance
to bodies or agencies (public or private)
concerned with implementation of road
maintenance, rehabilitation, development
and management; including prescribe
measures for preventing damage to Nigerian
roads;
• Ensure that road agencies carry out effective
monitoring of the conditions of all roads for
the purposes of timely implementation of
106 Nigerian Society of Engineers International Conference – Abuja 2007
road maintenance, rehabilitation and
development programs;
• Advise the minister on all aspect of road
management, from funding, institutional
structures, construction and private sector
participation etc.
The role of FRA do not cover the undertaking of
construction, rehabilitation and maintenance. It is
assumed that this will be contracted to the private
sector with emphasis on PPP for large scale new
projects. Secondly, the Bill goes on to stipulate the
PPP regulations for the NTC.
Human capital implications
The overarching objective of the road sector reform
is to engage with the private sector where
necessary. The draft “Road Sector Reform Bill”
separates the planning and management of roads
from implementation of road works to be
undertaken by the private sector organisations.
However, reforming the road sector without
addressing the human resource implications
particularly execution capacity of the downstream
private sector will not bring expected benefits to the
roads sector in Nigeria. For the reform to be
effective and holistic, in addition to creating
effective road agencies at the Federal, States and
Local Government levels with stable financing from
the Road Fund, capacity and capability of the
private sector deliverer needs to be strengthened.
Emeka Agbasi & Chris Okoye
The Road Sector Reform Bills include a streamlined
organizational and management structures to ensure
a lean and effective NRFB and FRA aligned to the
principle of managing roads like a business. The
overall consideration in the design of the
organizational structure of the National Roads Fund
Board / Road Fund is to ensure that the new agency
is lean, cost effective and operationally responsive.
The idea is to avoid the mistakes in the past where
agencies are overstaffed and resources, which could
have been applied to roads maintenance, are used to
pay unproductive workers. For the two options of
organizational structures proposed namely
Centralized and Decentralized structures, the overall
staffing requirement is fewer than 50 professional
staff including road engineers. Similarly, the two
organisational and management structure options
proposed for the FRA are - Centralized
Management, Supported By 36+1 State Structure
and Six Business Units Plus Small State Presence.
Any reorganisation of staff will substantially reduce
the combined staffing of MoT (Highways/Works)
and FERMA, regardless of which organisational
structure option is selected. MoT and FERMA
combined staffing is estimated at about, 4,600 and
1,400 respectively, given a combined staffing of
6,000, which is impossible to accommodate, within
a new private sector model. FMT document
‘Strategy for the re-settlement of Federal Roads
professionals’, published in March 2007 indicates a
staff need of about 300 professional staff out of
3,406 current professional staff.
107 Nigerian Society of Engineers International Conference – Abuja 2007
It is anticipated that similar reduction in staff
requirement will be seen at the State and Local
Government levels when road agencies are
replicated. It is noted that State Ministries of Works
are understaffed for senior positions and often lack
key skills as well as motivation. Local Government
Authorities struggle with human resource capacities
for management of roads, and mostly the local
communities undertake occasional spot repair on a
part of the unclassified road network, consisting of
local roads, tracks and paths. The surplus personnel
that will become available by the creation of these
road agencies at federal, state, and local government
levels are unlikely to be adequately equipped with
requisite technical, managerial and commercial
skills needed to successfully operate in the private
sector. With steady financing and long term
concession contracts, these skills will be required by
consultants, contractors and suppliers to meet the
procurement needs of the road sector and likely
growth in demand. Non-core road agency activities
identified for contracting out to private sector
procurement of services or the adoption of private
sector participation (PSP) are:
• Move from ‘direct labour’ (account)
personnel, to private sector contractors for
all construction, rehabilitation and
maintenance, except some remote locations
for maintenance
• Sell off all depots, heavy plant and
equipment
Emeka Agbasi & Chris Okoye

• Employ independent consultants to Way forward and action planning

undertake ‘verification and certification’ for There is an urgent need to build up the private
stage payments and completed work sector capability and capacity in Nigeria if the
authorisation by contractors benefits of ongoing institutional reforms are to be
• Contract out all road design projects realised. In general, it is recognised that there is
• Audit services and anti-corruption poor private sector capacity in construction and
investigations to be undertaken in regions & above all, the lack of basic management skills at all
states by external audit personnel levels in the road sector. In contrast, there is

• All non essential staff: security, catering and abundance of technical understanding of road

building services / estate management to be construction, rehabilitation and maintenances at a

contracted practical level. However there is need to assess

• Contract out part of ICT support services, each State to ascertain the level of readiness of the

retaining a small in-house capacity private sector to fill the gap and demand to be
created. In the interim, short, medium and long

It is noted that in the early years of the creation of term action planning framework to develop and

FRA, special provision will be made for current sustain private sector executive capacity are

FMT and FERMA’s direct labour personnel who discussed. The Nigerian Society of Engineers and

will want to set up private sector businesses. other professional institutions, government, industry

Regardless of this provision, a road sector resource and education providers all have a major role to

assessment is required to evaluate the availability of play.

highways and bridge engineers with skills and

experience in the procurement, management and In the short term during the transition phase, the

delivery of road construction, rehabilitation, and large number of surplus FMT staff as a result of the

maintenance projects. This is necessary to develop new reform institutions to be created including its

a short, medium and long term human capacity direct labour needs to retrained. The training will

building strategy for the private sector and feed into be focused on re-positioning and enabling the

plans for the development of a sustainable domestic excess staff to actively participate in private sector

contracting and consulting industry. Proposed Road led procurement of road works and also increase the

Sector Reform Bill has addressed institutional capacity of the sector. Similar re-training will be

capability at Federal level which will be replicated repeated for State and Local Government staff.

at State level. Staff at federal, state and local government levels

have been identified to have poor management

108 Nigerian Society of Engineers International Conference – Abuja 2007

Emeka Agbasi & Chris Okoye

skills levels coupled with outdated practices and industry to make it relevant to the needs of the
civil service ‘working culture’ which will limit their market such as the road sector.
competitiveness in the private sector. Thus
immediate re-training to address these skills gap is A study on the output and employment trend of
required and should be put in place by first quarter engineers from Nigerian Universities and Colleges
of 2008. The Nigerian Society of Engineers is well is required to inform on the current status and help
suited to facilitate the requisite training in plan for the future. Failure to confront any decline
procurement, programme and project management in the production of the new type of engineer has
(PPM), financial and network management, long term implications on the development of the
commercial awareness and update existing technical nation’s infrastructure needed to fast track
skills. economic growth. Action is needed to counter and
reverse any negative trends. But such action must
In the medium term there is need for greater be based on reliable, in-depth information on
partnership and collaboration between education several key issues. These include: the current state
providers - universities and technical colleges, of undergraduate engineering education in terms of
government and the industry in the training of its quality, content and funding needs; future
engineers and technologists. The education system industry requirements; accreditation procedures;
responsible for producing new generations of and the extent to which the school system is
engineers should keep pace with the multiplicity of ensuring a healthy 'pipeline' of engineering
demands placed on engineers today and indeed with undergraduates.
the increasing need for engineers to sustain
Nigeria’s infrastructure development. To satisfy the In the long term no factor is more critical in
demand for engineers, students with the right underpinning and sustaining the overall health and
aptitude should be encouraged in secondary schools vitality of any national economy than a strong
to opt for engineering courses in universities and supply of graduate engineers equipped with the
technical colleges. Government should understanding, attitudes and abilities necessary to
acknowledge and quickly address any shortage of apply their skills in business and other
teachers in maths and physics, the essential environments. Business environments today
precursors of undergraduate engineering studies. In increasingly require engineers who can design and
the universities the structure and content of deliver to customers not merely isolated products
engineering courses has to reviewed with the but complete solutions involving complex
integrated systems. Continuing developments in the

109 Nigerian Society of Engineers International Conference – Abuja 2007

Emeka Agbasi & Chris Okoye
road sector in Nigeria will demand engineers with
procurement, programme and project management,
commercial, and Information and Communication
Technical (ICT) skill sets in addition to technical
knowledge to provide total solutions – from design
to operation and maintenance of the road network.
The traditional engineering disciplinary boundaries
are becoming blurred with added emphasis on
information and communication technologies.
Globally, engineering businesses now
engineers with abilities and attributes in two broad
areas - technical understanding and enabling skills.
The first of these comprises: a sound knowledge of
disciplinary fundamentals; a strong grasp of
mathematics; creativity and innovation; together
with the ability to apply theory in practice. The
second is the set of abilities that enable engineers to
work effectively in a business environment:
communication skills; team working skills; and
business awareness of the implications
engineering decisions and investments.
It is this combination of understanding and skills
that underpins the role that engineers now play in
the business world, a role with three distinct, if
interrelated, elements: that of the
specialist imbued with expert knowledge; that of the
integrator able to operate across boundaries in
complex environments; and that of the change agent
providing the creativity, innovation and leadership
necessary to meet new challenges.
110
upcoming Nigerian engineers with skills sets to
compete at home market including the road sector
and globally, the curricula of institutions of higher
education like Universities and technical colleges
producing engineers need to be reviewed to assess
the extent to which these essential ingredients are
met and action taken if necessary.
Conclusions & Recommendations
seek The Road Sector Reform Bills have proposed a new
institutional framework to promote maintenance
culture and Public Private Participation (PPP) in
road development. The proposal culminates to
setting up of the National Road Fund Board/Road
Fund and the Federal Roads Authority. Legislative
bill for the creation of State and Local Government
road agencies are currently being prepared. The
reform proposal has a huge human resources
implications which needs to be carefully managed
of to ensure that the benefits of the reform are realised.
Prompt attention needs to given to the training and
development of graduate engineers, and
undergraduate engineering education in the Nigeria
in order to meet the demands of private sector
participation in the road sector. This will require
technical input from the Government, the engineering
institutions like the Nigerian Society of Engineers,
industry and academia. The major recommended
actions are as follows:
To equip
Nigerian Society of Engineers International Conference – Abuja 2007
Emeka Agbasi & Chris Okoye

• immediate re-training of existing surplus Addressing this situation requires urgent initiatives
staff at Federal, State and Local levels to on the part not just of industry and the education
equip them with requisite skills to providers, but also of Government, the engineering
participate in private sector led procurement institutions like the Nigerian Society of Engineers
of road works; and COREN. The objective must be ensure a
• greater partnership and collaboration steady supply of well trained, skilled and
between the education providers, and experienced engineers to meet the expected growth
industry to ensure that well rounded in demand in works and services driven by
engineers and technologists are produced Nigeria’s infrastructure development needs. In
that meet the needs of the road sector particular private sector led procurement, design,
industry; construction operation and maintenance of the road
• education providers and industry need to network.
find effective ways of ensuring that course
content reflects the real requirements of References
industry and enabling students to gain 1. Setting up Nigerian Roads Board (2007),
practical experience of industry as part of Road Fund and the Federal Roads Authority.
their education; Interim Report July 2007.

• the accreditation process for university

engineering courses should be proactive in 2. Road Vision 2000. Framework Study for the

driving the development and updating of National Roads Board.

course content, rather than being a passive

auditing exercise; 3. Road Network Study. Messrs Sheladia and

• much more must be done to ensure that Associates & Yolas Consultants.

school students perceive engineering as an

exciting and rewarding profession that is 4. Concession Study. Louis Berger

worth pursuing; International, Obi Obembe Associates, &

• unless action is taken a shortage of high- HRH K International.

calibre engineers entering industry will

become worst with serious repercussions for 5. World Bank (2007) Evaluation of Bank

the productivity and creativity of Nigerian Support for Road Funds, Background Paper

businesses. For Evaluation of World Bank Assistance to

the Transport Sector, 1995 – 2005.

111 Nigerian Society of Engineers International Conference – Abuja 2007

Emeka Agbasi & Chris Okoye

6. Transport 2050 – The route to sustainable

wealth creation, Royal Academy of
Engineering, UK, 2005.

7. Talvitei, A P (1996) International

Experiences in Restructuring Road Sector,
Transportation Research Record 1558.

8. Data base for Road Management and

Financing developed within the framework
of the Road Maintenance Initiative (RMI) by
SSATP.

9. Menmaamar, M. (2006), Financing of Road

Maintenance in Sub-Saharan Africa,
Reforms and progress towards second
generation road funds. SSATP Discussion
Paper #6, Road Management and Financing
– RMF Series.

10. Heggie, IG. And P. Vickers (1998)

Commercial Management and Financing of
Roads, World Bank Technical Paper # 409.

11. Willoughby, Christopher (2007) Public

Expenditure Management in the Nigerian
Road Sector.

112 Nigerian Society of Engineers International Conference – Abuja 2007

Emeka Agbasi & Chris Okoye

Table 1: Funding Profile for Federal Highway Capital Projects: 1999 – 2007

Federal Ministry Of Transportation: Federal Highways Department

Departmental Budget Actual Actual Release

Year Requirement Appropriation Releases Versus
(=N=bn) (=N=bn) (=N=bn) Requirement (%)
1999 25.00 14.37 7.00 28.00%
2000 81.42 32.03 32.00 39.30%
2001 49.50 67.16 57.96 117.09%
2002 85.00 70.00 41.63 48.98%
2003 191.95 66.53 20.34 10.60%
2004 161.00 42.56 41.35 25.68%
2005 143.65 82.52 65.53 45.62%
2006 165.56 67.85 67.09 40.52%
2007 202.00 178.42
TOTAL 1,105.10 621.44 332.91

Departmental
Requirement
250.00 Budgetary Allocation
Amount (bn Naira)

Actual Releases

200.00

150.00

100.00
Year

50.00

0.00
1999 2000 2001 2002 2003 2004 2005 2006

Figure 1: Funding Profile for Highway Projects from 1999-2006

113 Nigerian Society of Engineers International Conference – Abuja 2007

Emeka Agbasi & Chris Okoye
26-Aug-04 RMI MATRIX: Policy Reform Status by Country
Long term road Allocation of RMF Road Netwo
Countries Transport Policy(1) Road Fund Road Agency (2)
investment program resources Condition (

% Coverage of Fuel Levy

% Coverage Direct
Board with % Share of Road % Share of road routine US cents/liter
Cabinet- Adoption Period Creation Has a of Total channeling Main Rural Urban Established Since Has a Private % in good /
Adopted? Established? Private Fund resources user charges maintenance %in
adopted? Date Covered Date Board? Maintenanc of Road user network network network ? When? board? Majority? fair
majority? from user charges from Fuel Levy needs from all Gas Diesel
e needs (3) charges?
sources(3)? (4)

Angola yes 1999 yes yes - no - - yes no 70% 20% 10% yes 1990 30% 7

Benin yes 1993 yes 1997-2001 (5) yes 1997 yes no 90 yes no no - - 75% 2

Burkina Faso yes 2000 yes 2000-2005 (6) no (4) - - - - - - - - - - - - no - - 57% 4

Burundi yes 2001 yes 2003-2006 yes 2001 yes no 95 80 no no 2 2 yes 80% 20% - no 5% 9

Cameroun yes 1996 yes 2003 - 2005 yes 1998 yes yes 90 93 no no 4 8 no 75% 12% 13% no - - - 60% 4

Cape Verde yes 2003 yes 2003-2007 yes 1999 yes no 100 100 no 40 50% of the taxe no yes 2003 yes no 58% 4

CAR yes 1990 yes 1990 -2005 yes 2000 yes no 80 80 no no 9 9 yes 90% 10% no 75% 5

Chad yes 1999 yes 2000-2009 yes 2000 yes yes 90 70 70 no yes 90% 0% 10% no no 30% 7

Cote d'Ivoire yes 1998 yes 1998-2005 yes 2001 yes no 30 100 60 no 7 2 yes 100% yes 2001 yes no 60% 4

Ethiopia yes 1998 yes 1997-2007 yes 1997 yes no 40 8 100 80 1.50 1.03 yes 70% 20% 10% yes 1997 yes no 62% 3

Gabon yes 1998 yes 2002-2012 yes 1997 yes yes 46 no no - - - no

Ghana yes 2000 yes 2002-2007 yes 1997 yes yes 100 95 80 40 4 4 yes 47% 23% 25% yes 1974 - - 65% 3

Guinea yes 2001 yes 1998-2007 yes 2000 yes yes 100 60 no no 2.6 2.6 yes 68% 25% 7% no - - 66% 3

Kenya yes 1997 no - yes 2000 yes yes 100 yes 7 7 yes 57% 40% - no - - 57% 4

Lesotho no (4) - yes 2003-2007 yes 1996 yes no 100 60 yes 30 no (5) 80% 20% no (7) - - 96% 4

Madagascar yes 2000 yes 2003-2008 yes 1997 yes no 50 50 100 50 5 5 yes 80% 5% 15% no - - 30% 7

Malawi yes 2002 no - yes 1997 yes yes 80 50 6 5 yes 60% 20% 20% yes 1997 yes yes 63% 3

Mali yes 1993 no - yes 2000 yes yes 19 81 75 52 0.6 0.6 yes 80% 20% - yes 2005 (8) yes yes 44% 5
Mozambique yes 2002 yes 2001-2010 yes 1999 yes no >95 90 yes 85 9 8 no 70% 20% 10% yes 2001 yes no 70% 3
Niger yes 2003 no - yes 1999 yes yes 20 no no 6 6 no 90% 10% no 57% 3
Nigeria no - no - no - no - - - no - -
Rwanda no (4) no (4) yes 2000 yes no 100 80 no 30 3 3 yes 100% 0% 0% no - -
Senegal yes 1999 no - no - - - - yes no yes 2002 yes no
Tanzania yes 2002 yes 2002-2011 yes 1998 yes no 90 90 90 50 9 9 no 70% 20% 10% yes 1999 no no 50% 5

Togo yes 1996 yes 1997-2011 yes 1997 yes yes 80 - 60 50 7 7 yes 70% 10% 20% no - - -
Uganda yes 2001 yes 2002-2011 no - 100 60 - yes 1998 no no 81% 1
Zambia yes 2002 yes 1997-2007 yes 1994 yes yes 95 100 35 8 8 no 33% 55% 12% yes 2004 (8) yes yes
Zimbabwe yes 1997 no - yes 2001 yes yes 2.5 2.5 yes 39% 45% 16% no 80% 2

(1) This may be for roads alone or as part of a broader transport policy document (5) The long term road investment program is being updated with the sector strategy

(2) Denotes an Road Agency (6) Being updated to 2008

(3) Denotes Public raod ntwork as a whole, unless otherwise stated (7) The Main network maintenance is done by the M of Public Works and Transport by an annual Treasury Budget contrib

(4) In preparation (8) The legislation for the Agency has been passed, but the Agency has not yet been set up

114 Nigerian Society of Engineers International Conference – Abuja 2007