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Friday, January 21, 2022

Infrastructure Dilapidation In Nigeria, Effective Monitoring And Audit To The Rescue

Experts have kept on saying that the level of infrastructure dilapidation in Nigeria is regrettably yearning for a state of emergency to be declared, and not a few people in Nigeria are of the opinion that the dilapidation level would not have been high if there was concerted effort from the state governments to match what the federal government has been doing.

According to the Honourable Minister of Finance, Budget and National Planning, Zainab Ahmed, Nigeria’s aspiration and infrastructure target for 30 years (2014-2043) is aimed at increasing the current infrastructure stock from 30% of GDP to at least 70% by the year 2043.

She estimated that $3trillion infrastructure investment would be needed in the next 30years. This amount broken down, means the country requires $100billion yearly to achieve such target

While the federal government has been doing so much to ensure the infrastructural development in the country is given some considerable attention, the state governments (except a few) have virtually ceded their own their own responsibility in all aspects to the federal.

So far, the federal government has identified 17 areas of infrastructure categories including power/energy that require a status update of each as it pertains to benefits accruing to the Nigerian society.

Unarguably, the present government has put a solid emphasis on rehabilitation of existing infrastructure coupled with expansion. New ones are also being introduced to facilitate the development needs of the country, but the biggest impediment to realising the noble objectives is the lack of funds to see them through.

The Honourable Minister of Finance, Budget and National Planning, Zainab Ahmed at separate forums, said Nigeria’s largedst investment needs, are in the energy and transport sector which represents more than 50% of the required infrastructure investment.

Therefore, there would be a need to prioritise the ongoing projects in the country to ensure they are put into use so that the benefits accruing are realised quickly. The funding challenge has been so serious that in the last 15 years, the infrastructure bills have kept rising, which makes the large funding demands almost unstainable.

Of course, funding (usually huge investment) is of immense importance because infrastructure is the backbone of any nation’s prosperity, health and welfare. A country’s infrastructure condition has a cascading impact on the nation’s economy, impacting business productivity, gross domestic product (GDP), employment, personal income, and international competitiveness.

Going by what has been happening in the country, there is need for the national integrated infrastructure masterplan, to encourage infrastructure monitoring, among other needs, as this could lead to identifying the requirements to establish by each system within and project the real needs for the next 10 years. It, therefore, becomes the responsibility of the Federal Ministry of Finance, Budget and National Planning to monitor all infrastructure projects, the moment the planning and implementation steps begin.

The first step towards monitoring, as it is almost a rote, is to carry out a census of projects, a deliberate audit to ascertain the causes of time and cost overruns and identify the challenges as they are and proffer executable solutions. Under post contract monitoring, the executing agency and the Federal Ministry of Finance, Budget and National Planning have to agree on performance of existing infrastructure to ensure that they are actually providing the needed succour to Nigerians as they were initially conceived.

There has to be the monitoring of the implementation to ensure that projects are completed in time, within budget with the intended output goals. An effective monitoring mechanism should be able to detect project construction cost overruns and delays in time to enable the executing agency apply corrective actions.

The monitoring of operations and maintenance of infrastructure ensures that the created assets achieve the desired outputs and outcome over their useful life and that the assets are properly maintained over their life cycle.

For the monitoring to be effective, there is need to look at both orgainsational and institutional capacity. The capacity must first be in place. In addition to these is the issue of individual capacity. If the organisational and institutional capacities are in place, the staff required has to also have the capacity to look at the reports emanating from the various executing agencies and take drastic measures where necessary. 

The project reviews that are sent from the agencies have to convey sufficient details to enable sound decisions to be taken, so that projects can be suspended if irregularities are discovered by the Federal Ministry of Finance, Budget and National Planning.

The preconditions for effective monitoring include organisational, institutional and individual capacities must be in place, so that identified gaps can be closed. Overall, it is the Federal Ministry of Finance, Budget and National Planning that should determine a threshold of the minimum infrastructure project cost that would require monitoring. The ministry can then decide to stop further funding of a project, if the funding appears unsustainable, especially where there are competing demands.

It is instructive that the cost monitoring should start from the tendering process. When the tender process yields costs that are in excess of 10 percent of the estimate, the investment initiatives must be reassessed. Then, the executing agency which is financially responsible should be invited to submit an analysis of all technical and economic information used to justify the cost increase. The project may then be reappraised, using the new information. Once the reappraisal has been done and resources earmarked, the goal is for no further change in project cost.

Considering all this, it is advisable that the Federal Ministry of Finance, Budget and National Planning should be assigned the responsibility for oversight of all executing agencies involved with infrastructure implementation activities, with a standardised reporting template developed and entries submitted quarterly. The ministry and the executing agencies could in collaboration deploy the monitoring tools comprising project reporting, progress meetings, site visits, and information system management, all to ensuring that the infrastructure across the country is adequately and sustainably maintained.  

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Yunusa Tanko Abdullahi
S.A Media and Communications to the Honourable Minister of Finance, Budget and National Planning


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