Road infrastructure, real estate and economic development

By: Akintunde S. Ayotunde

IT is widely acknowledged that infrastructure is essential to achieving sustainable economic development. A critical macroeconomic environment component with which nations drive economic activities, necessary amenity and facility that an economy needs to function properly, infrastructure unarguably remains the key that unlock the growth of a nation, ensure its progress and oils its development. Infrastructure is the backbone of a nation’s development. A country with poor infrastructural profile will find it difficult to sustain growth, poor infrastructural trajectory would discourage social – cultural, political and economic enhancers that would influence the “take –off” activities of the nation’s development process. Talking of roads, they are the arteries through which the economy pulses. They enhance connectivity, facilitate people, goods, and services movement, and accelerate trade, economic growth and integration. Sustained investment in road development would boost and strengthen local economies, deepen development, foster social interaction and cohesion among the entire population, and ultimately improve the quality of life.

Roads also improve the effectiveness of state institutions across distance; enhance government’s ability to provide equal levels of public services, such as security, schooling, health care, policing, and several others across the states, local governments and communities, and enables a more balanced growth. It also enables the poor to better help themselves, with the effect that horizontal inequalities, exclusion, and marginalization, all major sources of grievances and conflict are reduced. The easier it is to move, the easier it is to govern, especially in low-capacity contexts. In their state-building periods, the East Asian states made the expansion of road networks a major priority. These states, China in particular, focused on stitching together nascent nations, catalyzed inclusive development process which ensured the state operates effectively everywhere while advancing other economic frontiers. Through massive investment in road infrastructure, China succeeded in increasing connectivity, strengthened national identity, boosted growth and investment in lagging areas, built up new growth pillars, increased the country’s attractiveness to investors, promoted inclusiveness, reduced social exclusion and grievances, increased living standards, reduced imbalances in growth, spurred exports and trade across borders, advanced strategic urbanization, regional growth poles, and a more balanced development.  The country offers many lessons for Nigeria in road infrastructure, real estate and economic development.

In Nigeria, roads constitute the most important component of the transport infrastructure network, and thus represent an important piece in our quest to promote inclusive development and achieve the Sustainable Development Goals (SDG). Unfortunately, Nigeria is currently facing significant challenges in road infrastructure, and even more challenges in maintaining the available road network, with many states suffering from poor road conditions. Less than 50 per cent of the country’s population has access to good roads and transport costs are twice as high, compared to other parts of the developing world. I commend the present administration’s efforts in addressing the nation’s infrastructure deficit though. Its road networks modernizing initiatives, via landmark projects like Lagos-Calabar Coastal Highway, Sokoto-Badagry Superhighway and several other road infrastructure projects across the country is worth commending. These projects would foster economic growth and improve livelihoods.

However, I cannot but mention the adverse effects of inefficient road infrastructure on housing development in our country. Good road transport network is the foundation of housing and sustainable economic development. Road infrastructure plays an invaluable role in real estate development, as a matter of fact; its role in housing provision cannot be overstated. From residential to commercial properties, proximity to transportation infrastructure, particularly roads and highways, has emerged as a fundamental factor influencing property development, and property value dynamics. Evidence suggests that good roads elevate property values near the highways, and this underscore the importance of strategic road infrastructure planning and execution. It is not in contention that the construction of the 3rd Mainland Bridge opened up Gbagada, Anthony, Ogudu and Ketu for real estate development, influenced the movement and relocation of people along the corridor, and improved rental values in the mentioned and adjoining areas.

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The state of Nigerian roads is deplorable, the nation’s infrastructure gap or deficit is adversely affecting the full potential of housing development. Bad roads have negative economic impacts such as making transportation of building materials from the market to the sites, and in a situation where real estate developers are the ones to provide basic infrastructure to and within an estate, we should expect prices beyond the reach of an average Nigerian for the houses and apartments. In as much as infrastructure deficits translate into housing development, economic and service delivery challenges, they also present opportunities for investment. The Federal Government would have to review its priorities and policy direction to be able to adequately develop the nation’s road infrastructure, which is said to require about $15 billion to be injected into the sector annually for 15 years. Given its limited access to international funding and taking into consideration its revenue constraints amidst competing priorities, government has to look into the direction of private capital funding as the most appropriate solution to inadequate infrastructure funding.

 The country is in great need of efficient public infrastructure and services as its infrastructure gap is adversely impacting the full potential of housing, economic growth and development. The first thing to do is to open up the entire landscape and neighborhoods. Without any doubt, development of adequate infrastructure, particularly road transport network is the foundation of housing and sustainable economic development.

Investing in road infrastructure is crucial for economic growth, poverty reduction and safety. Addressing road quality and accessibility is the surest way towards Nigeria’s progress and development. Roads are vital to any development agenda. They bring economic and social benefits. Nigeria needs Public Private Partnerships (PPP) investment model in road infrastructure to unlock the potentials in the housing sector.

• Ayotunde is an estate surveyor and valuer. He writes from Lagos.