CNG to the Rescue?
Sonni Anyang
The recent inauguration of some INNOSON-assembled, compressed natural gas (CNG)-powered buses by President Bola Ahmed Tinubu right inside the premises of Aso Rock Presidential Villa was obviously an opportunity to counter (via photo-op) the widespread criticism that he neither gave much thought to nor adequately prepared for the cost of living and welfare consequences of his decision to abruptly announce the withdrawal of government subsidy on petrol at his swearing-in last year.
Even the President’s most ardent supporters would agree that at the point of his famous ‘subsidy is gone’ pronouncement, or indeed soon after, it did not appear that any containment measures had been put in place to meet the entirely predictable and seismic fallouts of such a major policy move. The best such supporters have been heard to come up with is that had the president allowed for another round of public debate, the political moment for tackling the subsidy monster would have passed him by. The obvious response to this lame argument, of course, is that the subsidy that is said to have gone, now appears to have returned, afterall.
Regardless of the wisdom in the manner we had attempted to see off petrol subsidy, or whether, in fact, the stubborn thing has refused to go away, the Tinubu government is clearly putting a lot of faith in the ability of CNG as an automotive fuel, to help reduce the pain being felt by the generality of Nigerians from the sharp rise in transportation costs and associated difficulties occasioned by its signature policy decisions, namely, petrol subsidy removal and naira exchange rates equalization.The President therefore had to personally take delivery of 30 mammoth buses to underscore the point that CNG will be the salvation fuel.
While it was not openly stated that the presidential inauguration of the CNG-powered buses represented some kind of milestone, the Aso Rock ceremony has served to remind us that it was also in August, a year ago, that the Presidential CNG Initiative (PCNGi) was announced, as “a component of the palliative intervention” directed at “providing succour to the masses” in view of the “transitive” hardships of the fuel subsidy removal policy.
In particular, the PCNGi was meant to lower transportation cost for Nigerians by enabling the powering of motor vehicles(and industries) with cheaper, cleaner, safer and more reliable domestically produced natural gas. As an alternative to petrol and diesel automotive fuels, CNG ticks all the positive boxes—environmentally cleaner and therefore safer, cheaper (by at least 40% or up to 60% in some applications), abundantly available given that Nigeria is said to have more gas reserve than oil, plus the added advantage that gas can perhaps be more easily sourced locally with no need for imports. It can also be subsidised (if need be) without the drawbacks of subsidised petrol. Certainly, the scale on which Nigerian subsidised CNG can be smuggled to the rest of West Africa and further to Central Africa appears much less than for petrol or diesel. The PCNGi was intended to incentivise and accelerate CNG adoption.
On its website, PCNGi has stated its programme and objectives in clear, quantitative terms—with timelines. It was to start by making available 21,000 conversion kits at 10 participant workshops to get Nigerians to retrofit their petrol and diesel-powered vehicles to run on CNG. By the end of 2024, it hoped to reach 150,000 units with 250 participant workshops. By 2027, it would have achieved 1 million units through 500 participant workshops. For buses and tricycles, the Initiative was to take off with 5,500 vehicles with the expectation to finance 200,000 new ones across Nigeria.
PCNGi also had a plan to establish conversion centres all over Nigeria. It has projected 10 such centres at the start, and would drive to 100 at the end of 2024, with 1000 in view by end of 2027. With such a technically-orientd exercise, a corps of technicians and engineers would be needed. So, the start-up figure of 1000 trained technicians was planned, to be followed with 2500 by 2024 and 10,000 by 2027. The Initiative budgeted $25 million to be raised for the first phase with the figure set to rise to $75 million by the end of 2024 and $250 million by 2027—to support the development of CNG infrastructure for the country.
There can be no quarrel with the vision behind pressing CNG into service to rescue the country from the unending crisis of automotive fuel supply and prising. But will it be sufficient to substantially ameliorate the harsh conditions Nigerians currently face with regard to unbearable transportation costs and the hardship arising therefrom? On this question, the jury must remain out for a while. Perhaps, we should await the 2024 report of the Steering Committee. What is obvious in the aftermath of the recent #EndBadGovernance is that nearly a year into the implementation of the CNG initiative, not much of a noticeable dent has been made in the challenge of crippling transportation costs. Nigerians are obviously no longer amused by the situation.
If we assume that PCNGi will be the exception in a Nigeria that is used to trashing the noblest of ideas through incompetent execution, and the goal of a million vehicles running on CNG by 2027 is actually met, that number would amount to less than 10% of the total vehicle population in Nigeria (Estimated Vehicle Population in 2018 was 11,826,033) based on the figure available to this reporter at the time of writing. Likely, the total vehicle population must have gone up substantially with over 500,000 new vehicles registered every year since then. Can reducing the price of fuel for that tiny a proportion substantially lower transportation costs for the entire nation? Put another way, with over 90 percent of motor vehicles likely to retain propulsion by petrol and diesel, will anything other than a substantial fall in the price of those fuels have a dampening effect on transportation costs? As it pursues the CNG option, the Tinubu administration would do well to bear this question in mind. In fact, it should actively consider the distinct possibility that its efforts to push the adoption of CNG as automotive fuel will not have that significant an impact.
In pursuing the CNG transport fuel option, government must have been encouraged by, and has approvingly cited, the examples of China, India, Iran, Pakistan and other countries that have substantially shifted to that fuel type. There are two key differences between those countries and the situation in Nigeria. The first is that it took a while for those countries to rollout their CNG infrastructure. Besides having a proven track record of excellent programme execution, those countries did not do it as an emergency (not to say panic) response to a dire national crisis such as the one in which Nigeria currently grapples with. Second, most of the countries cited in all likelihood, manufactured their conversion kits and fuelling infrastructure, having built for themselves, reasonable domestic manufacturing capacity. Nigeria on the other hand, has to rely on importation either of fully built kits and associated equipment or components for local assembly. The lack of domestic manufacturing capacity continues to hobble us wherever we turn. And while this cannot be developed overnight, the earlier we start treating that national weakness, the better for us. Thus far, there’s no indication that we are paying anything other than the usual lip service to this urgent national need.
Above and beyond the foregoing, getting Nigeria moving with or without CNG and with or without petrol subsidy, will not be efficiently and effectively achieved until and unless we have a properly organised public transportation system. If any sector of our national socioeconomic life is disorganised, inefficient and dysfunctional to a disgraceful degree, that sector is public transportation.
As we speak, no Nigerian city of a million or more in population, has a mass transit system that can properly be so-called. What exists in Lagos and recently started in Abuja, is embarrassingly rudimentary. How can a country of more than 200 million people with cities boasting populations of two, three, four and even 20 million, not have rail-based transit systems? How can such a country hope to be part of the 21st century? It is a testament to the remarkable short-sightedness of Nigeria’s governing elites that mass public transport has been handled with such irresponsible levity. It is as if our leaders are not aware of what other nations have been doing in this regard. Or that an efficient and effective transportation system is indispensable to anything at all resembling modern development.
Right here in Africa, Ethiopians, Moroccans and Egyptians are scaling up with transit systems; metro systems, subways, trams and RBT (not the joke in Lagos, please) that function almost like trains. Here in Nigeria, we continue to deploy an assortment of dangerous contraptions as means of public transportation.
Hard data on the scale of the use of motorcycles (Okada) as a mode of transport in Nigeria remain unavailable, but if we assume that that widely deployed mode of vehicular transport serves even up to 10 percent of Nigerians, then the scale of inefficiency involved is enough to keep us perpetually backward. A commercial motorcycle is operated by one person and generally can transport only one person at a time. An average subway train on the other hand, involves one or two operators carrying anything up to 1600 people at a time. A city bus has one driver transporting 80 people (or more if, as Fela sang, 99 are standing). We can judge for ourselves, which of the modes are more efficient and conducive to society’s well-being.
Merely having CNG-powered vehicles outside the context of a comprehensively planned public transportation system will not come close to solving the problem of high, inflation – stoking transport costs. It will certainly do little to reduce the chaos and inefficiency of Nigeria’s transportation sector.
In addition to his CNG Initiative, President Tinubu should cause to be convoked immediately, a national policy dialogue with stakeholders, principally state governors, on how to quickly start the roll out of a well-designed, modern intermodal public transportation system for the country. Down the line, state governors should do the same with local government chieftains. As a starting point, let each local and state establish transit systems based on CNG-powered buses, as the lowest hanging fruit. Even as that is being implemented, planning for rail-based transit systems should commence, to be followed with immediate implementation.
Of course, if any feasible national railway plan exists, it should be dusted up, reviewed and implemented with more seriousness than the desultory efforts of the Jonathan-Buhari years.
The implementation of a national railway plan that would connect all state capitals in the country should have been a priority project of the Tinubu government in place of the ambitious and controversial highways it has embarked upon. In addition to bringing its innately superior efficiency to such an important economic sector, rail is less carbon-intensive than road transportation. This is one reason forward-looking countries like China are pursuing rail-based transportation systems like their very existence depends on them. And in a way it does, since it generates lower emissions and less greenhouse gases.
For Nigeria, a massive railroad build-out would be one easy way to urgently and easily develop the much-needed domestic capacity in basic industries and heavy engineering. Without such a capacity, real sustainable development will continue to elude us. So, the implementation of a comprehensive national transportation system, centred on less carbon intensive rail-based platforms, would enable the country to kill two or more birds with one stone — give Nigerians access to affordable transportation options and engender industrial development. Such organised transportation systems make it easy to efficiently and effectively direct transport subsidies to those who need it the most. Subsidy, when applied to automotive fuels rather than directly on mass transportation systems, benefits the less deserving more.
Apart from rail systems, Nigeria has great potential for marine transportation. Endowed with numerous navigable inland waterways and an extensive sea coast, the country could easily cut cost for end users through a well – organised marine transport system using boats, ships, ferries and barges that can deliver up not just efficiency but also comfort to commuters. The recent attempts to step up on water transportation in Lagos State with LAGferry and Omi-Bus services while welcome is but a pale shadow of the possibilities that that mode of transportation holds for Lagos State, a place totally surrounded by navigable bodies of water. The use of boats and ferries as reliable means of urban transportation in places like Hong Kong, Bangkok and Istanbul show that Lagos State can and should push harder in that direction, bringing into service, bigger and safer vessels than the outboard – engined equipment it is currently using. Even a hundred of the 40-seater boats LAGferry and Omi-Bus are using, do not come close to matching the 100,000 plus commuters that the ferries in Hong Kong deliver daily.
The domestic manufacture of vessels and the construction of accompanying infrastructure are also fertile grounds for industrial expansion and employment generation.
Whatever appropriate conveyance systems are brought into service in an organised manner will help us to become part of the 21st century world with a transportation mix that is efficient, effective, intermodal and dignifying. No modern economy can even begin to function properly if it continues to fool around with a disorganised and chaotic system for the essential task of moving people and goods from one place to another.
Elsewhere in the world, after education, health, public safety, effective public transportation is an indispensable responsibility of governments at all levels.
As pointed out earlier, organised transit systems make it easier for government to directly subsidise public transport without the sort of issues that have bedevilled the management of fuel subsidy in the country and led to the present pinching pass. Afterall, we don’t drink the subsidised fuels; we use them mostly to power vehicular movement. The very desirable direct subsidisation of transportation can only be possible if it is organised to minimize chaos, render touting (agberos) irrelevant and significantly reduce the use of tricycles and motorcycles in the transportation mix.
Fuel subsidy was first introduced in 1973. We have spent the last 50 years—half a century—tryingto manage it effectively without success. We are entering a second half century without hope of a solution to the economically disruptive and politically charged challenge of fuel supply and pricing. It is about time we tackled the problem from the point of the end use to which automotive fuels are put. Since that end use is mostly transportation, that is the sector to which the Tinubu government must pay attention if our hope of national economic salvation is to be renewed rather than dashed.
Let us have CNG by all means, but let us also organise and modernise transportation in Nigeria. We will not go far until we do so.
•Mr Anyang is a former federal commissioner at the Revenue Mobilisation Allocation and Fiscal Commission, a former banker and a journalist
