Nigeria to loosen grip on transport

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Abuja - Nigeria would reduce state control of its transport industry to help ease dependence on crude oil and attract investment in freight rail to move grain and limestone, the country’s privatisation agency said.

Eight reform bills drawn up to lift restrictions on private ownership of transport infrastructure, including ports and waterways, had been put before the cabinet. Four had already been approved and sent for consideration by legislators, Benjamin Dikki, the director-general of the Bureau of Public Enterprises, said last week.

“The plan is to create an enabling environment for private sector investments to thrive. We’ve seen the reforms succeed in the power sector so it tells us we’re on track.”

Nigeria last year handed control of 15 former state-owned power suppliers to new owners, including Siemens and Korea Electric Power, marking the start of a market-driven electricity industry in Africa’s second-biggest economy.

MTN Group, India’s Bharti Airtel and Emirates Telecommunications are foreign owners of the country’s biggest cellphone companies after telecoms was also opened up to private investment.

The new transport laws, which could be passed before the end of the year, were part of President Goodluck Jonathan’s attempt to reduce the economy’s reliance on its oil industry, Dikki said.

Africa’s biggest oil producer relies on crude for as much as 95 percent of foreign exchange income and 80 percent of government revenue, according to the central bank.

“The reform bills will abrogate the monopoly laws that restrict private sector participation in those sectors,” Dikki said.

“Once these bills are enacted, we will be able to do concessions of viable federal roads and existing railway tracks, and even new tracks.”

A lack of planning and funding for Nigerian rail expansion has resulted in a drop in freight-rail capacity to 150 000 tons a year, compared with 3 million tons in the 1970s, according to the Transport Ministry.

Most freight is now transported on worn-out and congested roads.

Feasibility studies on two twin-track railways are in progress, including a 673km east-west coastal line and a 280km link between central Kogi State and the capital, Abuja.

Both would be built under a public-private partnership, Transport Minister Idris Umar said in 2012.

Under the transport reforms, the government would focus on policy while a state-owned regulator would be created to oversee the industry, allowing “operators to operate in an atmosphere that is free for entry and exit”, Dikki said.

Government funds could be freed for education, health care and other social welfare projects, he added. – Bloomberg


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