The National Transport Commission Bill

Minister of Transport, Rotimi Amaechi

By LakinThibiebi

Transportation is an integral part of economic development in any society. Hardly can any nation advance economically, in a modern world, without effective transportation system. Despite the advancement in technology and the attendant ubiquitous nature of globalisation, which allows someone in Nigeria to sit in the comfort of his office and still do business with another individual in faraway China, transportation remains inevitable. Whereas the negotiations and business dealings for goods can be done online to save time and reduce cost, the goods will still be delivered through some form of transportation. In actual fact, rather than relegate transportation into extinction, technology has only improved it. However, it is one thing to have transportation to support business; it is another subject entirely to have efficient and integrated transportation system that truly supports and advances economic development. An efficient transportation system rarely occurs by happenstance. It is often a product of well-designed structure articulated in a transport policy and sustained by an effective regulatory body. This is the practice in many developed nations of the world where the transportation system truly supports economic development. A look at the composition and overview of transport commissions in other countries clearly shows their determination in offering viable transport services to the citizenry. This national aspiration to provide efficient transportation is usually captured in a transport policy driven by a special body – in some instances, transport commission. For instance, in Australia, the National Transport Commission provides quality, impartial advice and national transport reform proposals to government through the Transport and Infrastructure Council. The reforms proposed by the commission are strategically designed to improve transport productivity, improve environmental outcomes, support a safe transport system and essentially improve regulatory efficiency.

Other countries that boast of effective and efficient transportation systems either have a transport commission or its equivalent that sees to the sustenance of policy direction on transportation in their respective countries. It is easy to identify countries with such framework as their modes of transportation are usually well-connected and organised. Vehicles that are used for commercial purposes are regulated to ensure superior service. One of the chief reasons why Nigeria’s transportation sector has remained in its inefficient form is primarily due to the absence of a body that provides a well sustained policy pattern for the diverse segments in the transportation sector. Whilst air transportation in the country is regulated in line with international expectations, land transportation – the main means of transportation that is responsible for nearly 90 per cent of freight and daily passenger movement in the country –  practically lacks any form of regulation. This explains why our roads are filled with rickety vehicles transporting goods and people. Although the state and local governments are essentially in charge of urban transportation, there is no gainsaying the sector has been weakly regulated. Lagos is a typical example of this reality where, for road transportation, the available vehicles are insufficient to cater to the need of the growing population. Yet water transportation that wields enormous potential for movement of goods and people has been left undeveloped. As it is in Lagos, so it is in many urban cities in Nigeria. The states are simply a mirror of the state of affairs at the federal level.

It is this growth stalling absence of regulation that informed the introduction of the National Transport Commission Bill, which has now been passed by the upper and lower legislative chambers. The House of Representatives led the way in February 2017 while the Senate followed suit in March this year. Commenting on the passage of the bill, the chairman Senate Committee on Land Transport, Sen. GbengaAshafa said: “With this bill, we would successfully create a multi-modal economic and safety oversight regulator for the transport sector. This is very good for business as it brings standard and structure to the sector, while also increasing government’s revenue.” Stakeholders have expressed positive reactions to the passage of the bill. Many see it as a good development for the transport sector in the country, with a potential to trigger growth and economic development.

The bill seeks to establish the National Transport Commission which is designed to be an independent regulatory authority in the transport sector. The objectives and functions of the commission are wide-ranging – policy formulation, coordination of relevant government agencies in the transport sector and oversight on designated agencies. Core functions of the commission are to create an economic regulatory framework for the provision of transport services and facilities; facilitate effective competition, promote competitive market, conduct and ensure that the misuse of monopoly or non-transitory market power is prevented in the provision of transport services; promote private sector participation in the provision of transport services; ensure that operators and users have equitable access to the use of transport facilities, services, channels and routes while having recourse to the level of competition and efficiency of the regulated transport industry; and monitor performance of the regulated sector. The new law is all-encompassing in that it takes into consideration all regulated services and related transport services and facilities including ports, inland waterways, all forms of land transport including rail and road transports in Nigeria and within Nigerian waters. The only mode of transportation that will be not be regulated by the NTC is aviation, which is regulated according to international standards. The Commission shall be structured into various industry specific units, as the Board may from time to time deem appropriate for the effective discharge of its functions and operations. This provides exclusive powers on the Commission that strategically equips it to be a strong operator.

The benefits of the new bill cannot be overemphasised. To understand the benefits of the Commission, one only needs to look at the successes recorded by the Nigerian Communication Commission (NCC) in the telecoms industry. The telecoms industry in Nigeria has been a success largely owing to the strength of the regulator – NCC. The concept of separating operator from regulator in any sector is a highly beneficial one. This is an existing gap in our transport sector that the National Transport Commission Bill seeks to address. A major turnaround that stakeholders look forward to is the impeding full privatisation of the railway in Nigeria. It is expected that the establishment of the National Transport Commission will hasten the privatisation of the rail system in Nigeria. This transport segment alone in Nigeria has the potential to contribute maximally to the nation’s GDP when fully explored. Currently, the railway contributes practically nothing, as the entire transport sector is responsible for a little over one per cent to the Gross Domestic Product (GDP). This prevailing situation can be turned around with a well-articulated policy direction. Whereas the railway sector in other jurisdictions is an integral and highly important aspect of the transportation system, Nigerian government is still battling to keep the segment alive. In actual fact, early industrialisation in some advanced economies was built on the railway. The advancement of the railway positively impacted the growth of the steel industry that became the bedrock of industrialisation in some climes. In the case of Nigeria, railway was a major part of our industrial growth during colonialism. The once important transportation mode soon attained irrelevance as many Nigerians became more empowered to own personal vehicles owing to the oil boom. This retrogression was accentuated by the dominance of various governments that cared less about providing basic social amenities for the citizenry. A similar reality also stalled the growth of inland water transportation in Nigeria. These are promising areas that are awaiting development intervention from the National Transport Commission.

The NTC bill is now at the mercy of the President who is expected to assent within the next nine months. The danger in delaying assent to the bill is the level of uncertainty it creates in the industry. There is no doubt that investors are already positioning for the take-off of the National Transport Commission, in anticipation of policy formulation that will turn around the entire industry. In essence, the more we delay in turning the bill into an act of parliament, the more investment opportunities remain unexploited. There is currently no alternative to signing the bill. The 8th National Assembly has again shown leadership by passing this noteworthy bill. The 7th National Assembly also deserves commendation for initiating the bill. And with a presidential assent, a positive revolution in Nigerian transport sector would have been activated within the life of this administration. A new dawn awaits the transport industry in Nigeria.