HDMI: New Elixir for road development

Boost for road infrastructure as HDMI takes centre stage

By Lanre Abdul

With 135,000 kilometers of Nigerian roads in deplorable conditions, there is no better time than now to declare an emergency on road networks through exploring innovative and sustainable models to improve the state of the road and boost economic activities.

The Transport Agenda in this report highlights the various innovative ways the federal government has adopted anchored on the Highway Development Management Initiative (HDMI).

The Minister of Works, Sen. David Umahi recently disclosed that the administration of President Bola Ahmed Tinubu inherited 2,600 road projects worth over N14 trillion.

He said: “The ministry inherited a total of 2,604 projects, worth N14 trillion and for 18,000 kilometers of road, that’s what we had. Between when we came on board and now, about N4 trillion has been paid and so that is a balance of N10 trillion remaining.

“Now, in this N10 trillion, we have defined sources that could fund up to N4 trillion. So, we have a funding gap of about N6 trillion. That is what is there now.”

However as of September 2023 when the minister made this statement, more projects have been flagged off, thereby widening the funding gaps.

And as the funding remains an existential challenge, Nigerians are restless in their desire to see the long stretches of bad roads and highways fixed in record times.

Road infrastructure, just like other modes of transportation – air, rail and maritime, remains an integral enabler of any economy. Apart from aiding movement of people from one point to another, it also facilitates transportation of goods across diverse terrain without any hindrance.

Nigeria has a landmass of 923,768 square kilometres and an estimated population of over 220 million people. The country’s roads and highways span just about 200,000km while about 70 per cent of these roads are untarred, deplorable and have become death traps to motorists.

About 63 per cent of this is untarred and most are decrepit. Commuters describe the roads variously as “death traps,” “deplorable,” or “dilapidated.”

Umahi also recently cried out that the potholes on federal highways had deteriorated to “boreholes.”

SBM Intelligence, a geopolitical risk and strategic consulting firm, in a survey published in January 2025, highlighted the deplorable conditions of Nigerian roads.

According to the report, Nigeria’s inadequate road infrastructure poses significant economic challenges, costing billions of naira annually in lost productivity and resources.

The report added: “Roads are central to the country’s commerce, serving as critical lifelines connecting cities, villages and markets.

“However, the deteriorating state of these roads disproportionately impacts commercial drivers, whose voices are often excluded from broader transportation policy discussions,” the report added.

The survey engaged 245 drivers across eight major commercial hubs, highlighting widespread dissatisfaction with road conditions.

Vital issues identified include potholes (32.9%) and security concerns (25.6%), with many drivers reporting that poor infrastructure extends travel times beyond predictions by standard navigation tools.

The survey also revealed that traffic flow patterns, with evening hours seeing the heaviest congestion on interstate highways.

While some routes, such as Bauchi to Kano, Kano to Abuja, and Jos to Bauchi, have seen improvements, drivers in Kano pointed out that the federal roads are still bad due to government abandonment, poor drainage and incomplete projects.

These deficiencies exacerbate security risks, with 84.6% of respondents reporting incidents or threats along travel routes.

Dangerous hotspots were identified in urban centres critical for interstate travel like Lagos, Maiduguri, and Port Harcourt, the latter being the most hazardous due to rampant kidnapping and limited police patrols.

Government In Dilemma?

From South-West to North-West, South-East to North-East and South-South to North-Central, bad roads dot every nook and cranny of Nigeria. Apart from the N14 trillion inherited road projects highlighted by the minister, the Nigerian government estimated that about $3 trillion would be needed over the next 30 years to upgrade Nigeria’s roads.

Private Sector Intervention

With the huge infrastructural deficit and the funding gap, the need for a more innovative funding model has never been more imperative.

Even if the entire 2025 budget of N54 trillion is sunk into road construction, it is obvious that it would not be enough to fix the volume of untarred roads dotting the nooks and crannies of Nigeria.

Analysis of the 2025 budget indicated that N800 billion was allocated to the Federal Ministry of Works, which is about 0.057% of N14 trillion inherited projects by the Tinubu administration.

Therefore, the Federal Government is operationalising the HighWay Development and Management Initiative (HDMI) to facilitate private sector funding for the rehabilitation of major highways and roads across the country.

This is in addition to other funding models, which the government had explored and it is still exploring like the Tax Credit scheme and the Sukuk, among others.

What HDMI is?

The HDMI, according to the Federal Ministry of Works, is a Public Private Partnership (PPP) initiative that seeks to attract sustainable investment and funding in the development of road infrastructure and maximise the use of assets along the Right of Way (ROW) of federal highways in the country. This would involve Value-Added Concession (VAC) of some major highways.

Before President Tinubu took over power in May 2023, the then Works Minister, Mr. Babatunde Fashola, SAN, under former President Muhammadu Buhari, had developed the first phase of the VAC under the HDMI with plans to concession 12 economically viable road corridors to “technically and financially capable private sector firms/consortia.”

The 12 highways represent 1,963km or 5.6% of Nigeria’s 35,000km Federal Highway as follows: Benin-Asaba, Abuja-Lokoja, Kano-Katsina, Onitsha-Owerri-Aba, Sagamu-Benin and Abuja-Keffi-Akwanga Highways; the others are Kano-Maiduguri (Kano-Shuarin), Kano-Maiduguri (Potiskum-Damaturu), Lokoja-Benin, Enugu-Port Harcourt, Ilorin-Jebba, Lagos-Otta-Abeokuta and Lagos-Badagry-Seme Border.

The VAC Request for Proposal (RfP) Evaluation Report was presented and approved on Thursday, April 21, 2022 at the Project Steering Committee (PSC) meeting chaired by Fashola.

But since the HDMI initiative was conceptualised, it has not resulted in the completion of any of the listed roads due to what sources called bureaucratic bottlenecks. As a result, inflation set in and the project’s specification became unrealistic.

However, the Tinubu administration is reviving the initiative with projects such as Benin–Asaba, Lagos–Abeokuta, Enugu–Port Harcourt, and Sagamu–Benin.

The initiative allows the private sector to fix, toll and maintain the road over a period of time before it is handed over to the Federal Government.

Under the new arrangement as recently highlighted by the Minister of Finance and Coordinating Minister for the Economy, Mr. Olawale Edun who chaired a recent high-level meeting on HDMI, there is an investment of N1.5 trillion in nine major highway projects spanning over 900 kilometres, to be delivered through 25-year public-private concession agreements.

At the moment, Messrs Africa Plus Partners Nigeria Ltd (APPNL) are the concessionaires for Benin-Asaba and Lagos-Abeokuta road corridors under the first phase of the initiative.

Already, the Federal Government had commenced the tolling of the 227.2 kilometres Abuja-Keffi-Akwanga-Lafia-Makurdi highway. The arrangement was designed to help repay the loan obtained from the China Exim Bank.

Based on the arrangement, cars will pay N500, Sports Utility Vehicles (SUVs) will pay N800, light vehicles and minibuses will pay N1,000, while trucks, buses and multi-axle vehicles will pay N1,600.

However, vehicles driven by the police and the military will be exempted from paying the tolls.

The tolling was concessioned to Messrs China Harbour Operations and Maintenance Company Limited, in partnership with Catamaran Nigeria Limited, who will be responsible for tolling, maintenance, and overall operations throughout a 25-year period.

The other projects under the HDMI would also take the same shape – a 25-year old concession plan tagged, ‘build, toll, maintain and hand over.”

This has been widely hailed as a game-changer in road infrastructure development as it would reduce the funding pressure on the government.

Foremost Economist, Bismarck Rewane in a recent interview explained that the initiative allows the government to step back so that the private sector can put money into the roads and achieve maximum productivity.

He listed several benefits of the initiative, including lower cost of transportation, improved security, economic growth and productivity and inflation control.

He said: “Kidnapping is low, productivity increases, the cost of transportation which reflects in the prices of goods. So, you would now see the prices of goods begin to come down.

“Inflation is defined as the persistent increase in prices because of low productivity and an increase in money supply. So, we can take out the money supply by using the Monetary Policy Rate (MPR) and the Central Bank of Nigeria (CBN), but the persistent cause of inflation in the country is a reduction in productivity.

“Why is productivity reduced? Because when goods are produced, they cannot get to the market and there are post-harvest losses. So, you will now begin to see the difference between rural and urban inflation, which are usually reflecting because the roads are bad, because of post-harvest losses, and the price of petrol which is high.

“So, we have all these three factors leading to a reduction in inflation and when inflation reduces, your exchange rate begins to strengthen.”

Expanding Funding Models

The HDMI initiative was considered the latest in the series of innovative funding models, which the Federal Government is exploring to tackle road infrastructure deficit in the country.

This is in addition to the road infrastructure tax credit scheme where major companies operating in Nigeria were given tax waivers to take over some highway projects.

Companies that have been involved in the scheme are Dangote Industries Limited, BUA Group, Nigeria Liquefied Natural Gas (NLNG), among others. According to documents from the Ministry of Works, about N100 billion were mobilised through the scheme.

Under the Road Infrastructure Tax Credit Scheme, 33 road projects covering a total length of 1,564.95km were approved, pursuant to which private sector companies were incentivised to invest in the construction and rehabilitation of federal and state roads, and subsequently recover their investment back through an innovative tax credit mechanism, setting off credits against corporate tax liabilities.

In addition to that, the Nigerian National Petroleum Corporation Limited (NNPCL), took over 44 federal road projects worth over N1.9 trillion as far back as 2023. However, only a few of the projects were completed.

Also, the Sovereign Sukuk Bond was another innovative funding model to undertake infrastructural projects.

The basic principle behind Sukuk, popularly known as an Islamic or Shariah-compliant “bond,” is that the holder has an undivided ownership right in a particular asset and is therefore entitled to the return generated by that asset.

As a component of Islamic finance, Sukuk is a non-interest-based investment and financing instrument, which conforms to ethical standards and justice.

Recently, the Director-General of the Debt Management Office (DMO), Patience Oniha disclosed that through the Sovereign Sukuk Bond, which debuted in 2017, the Federal Government successfully raised N1.09 trillion.

“With this amount, over 4,100km of roads and nine bridges across Nigeria’s six geopolitical zones and the Federal Capital Territory (FCT) have either been constructed or rehabilitated,” Oniha said.

Similarly, the government has leveraged on the recovered fund to rehabilitate and reconstruct some federal roads under the Presidential Infrastructure Development Fund (PIDF) through which the Lagos-Ibadan Expressway was constructed.

Given the wide funding gap, transportation experts say the HDMI, if well implemented, would complement existing models and change the bad road narrative in Nigeria.

Experiences In Other Climes

As experts observed, road infrastructure concession has become a globally recommended practice in building infrastructure. From Europe and America, the governments have institutionalised the principle of build, toll and transfer.

In the United Kingdom (UK) for instance, M6 Toll is the first privately owned toll road built in the 1990s. The M6 through the West Midland conurbation is a very major UK transport artery serving local, regional, national and even international traffic. It is/was one of the most congested motorways in Western Europe.

Prior to the opening of the new toll road, the M6 through the east side of the West Midlands carried up to 160,000 vehicles a day – it was built to accommodate just 72,000.

The average speed between junctions 4 and 11 of the M6 (the section bypassed by the M6 Toll) was approximately 17mph (27 km/h), producing rush-hour journey times of up to 79 minutes.

Since the construction of the road, the government has institutionalised the private financing scheme where several roads were tolled with modern technologies adopted.

This is the practice in other parts of Europe where in a road infrastructure concession, a public authority grants specific rights to a private, or semi-public company to construct, overhaul, maintain, and operate infrastructure for a given period.

With the institutionalisation of the initiative, a large number of toll road and toll highway companies in Europe and America have emerged, boosting job creation while improving the conditions of the roads.

In the United States, the toll roads are estimated at 3,724.62 miles, comprising 1,736.86 rural and 2,059.60 urban roads.

Coming to Africa, South Africa has 59 national road toll gates with several concessionaires managing and operating the toll roads.

Charles Asenime, Professor of Urban and Region/Transport Planning and Dean, School of Transport, Lagos State University said the PPP model being adopted by the Nigerian government is what obtains all over the world.

He stated that tolling is not new in the advanced world, which was fully automated.

According to him, the government alone cannot embark on the entire road projects hence the need to bring in the private sector players to improve the conditions of the road.

“This is what HDMI is trying to achieve. It is a good initiative if it is managed properly so that it would not become a white elephant project all over the road,” he said.

The Don said with 90 per cent of movement being done by road in the absence of effective rail connectivity, there is the need to maintain the existing road infrastructure.

“Like the Lagos-Calabar road project, you can see the amount of money it is costing the government. So, in that kind of project you bring in the private sector and say, ‘okay, let us build Lot 1 while investors would take over the other Lots,'” Asenime said.

Challenges To HDMI

He said: “The first challenge I see is forex. In the sense that you would want to develop when naira to dollar is at a certain level, when you now build you find out that naira has depreciated further and that would bring a gap.

“I know there used to be some contingencies for such gaps. That instability in forex is one of the challenges that can come up. Also, when there is instability in the economy, people could be afraid to invest.”

 ‘Transport Policy Key’

The university Don further emphasised that having a transport policy was key to making the initiative work. “Do you know that right now Nigeria does not have a transport policy?” he asked.

He stated that there should be an integrated transport policy that would encompass all modes of transportation like rail, road and air. “There should be an inter-ministerial committee at a higher level, maybe the Chief of Staff or the Vice-President to oversee that committee,” he added.

‘How HDMI Would Facilitate Jobs, Improve Road Conditions’  

Experts also argue that beyond improving the road conditions, the initiative is expected to reflate the economy by creating massive jobs for the unemployed youths especially the artisans whose expertise would be required in the implementation of the projects.

“For me, it is good and it is an innovative way of raising funds for infrastructural development in order to actually facilitate the movement of people and reduce wastage resulting from dilapidated roads. It will also release time for productive purposes and then save the lifespan of perishable goods that are delayed as a result of bad roads,” Professor Callistus Ibe also said.

What Motorists Are Saying?

For the end users of some of these roads and highways, their experiences moving from one state to another have not been palatable. So, their expectations of the government are high and they want quick results.

Describing the state of Nigerian roads, Cyril Aiye, an interstate driver who plies Lagos-Akure road said, “My own experience is based on the route I am used to, that is Akure to Lagos, the situation on the road from Akure to Ilesha is not too bad, but from between Ilesha to Ife it is actually terrible and the security on the road is fair compared to the previous experiences and from Ibadan to Lagos, the experience is perfect but between Ibadan metropolis there is a lot of traffic which is gradually being improved upon.

“We still want the Federal and State governments to collaborate by improving the road network, majorly the potholes and the fear of the bandits on the road, most especially between Ilesha and Akure it’s still on the high side.”

Most motorists who spoke with our correspondent however welcomed the tolling initiative if it would change the present deplorable conditions of Nigerian roads.

“In my own view, the toll gate will be very good because the journey will be faster and not only that, the maintenance of our vehicles will be at a reduced cost.

“The private sector should come in because a lot of people believe that what belongs to the Federal Government is nobody’s property, the private sector will make the road last longer and the wear and tear of vehicles will then reduce,” Aiye added.

HDMI, A Welcome Development – NURTW

A leader of the National Union of Road Transport Workers (NURTW) in Lagos, Alhaji Yusuf Sani, stated that the tolling initiative is welcome if it would improve the condition of Nigerian roads.

He said, “If the tollgate will bring development and good roads, I don’t see any problem with that except we are enemies of progress. It would help those of us who are into the transportation business because without motorable roads we cannot operate effectively.

“The transportation fare is high today because of the bad state of our roads and as drivers we spend so much to maintain our vehicles.

“Also, the prices of food items will reduce drastically if we have good roads and then it will increase the lifespan of our vehicles as well and we would not be buying tyres every now and then.”

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Quotes: 1. “However, the deteriorating state of these roads disproportionately impacts commercial drivers, whose voices are often excluded from broader transportation policy discussions.”

2. “With this amount, over 4,100km of roads and nine bridges across Nigeria’s six geopolitical zones and the Federal Capital Territory (FCT) have either been constructed or rehabilitated.”
3. “Like the Lagos-Calabar road project, you can see the amount of money it is costing the government. So, in that kind of project you bring in the private sector and say, ‘okay, let us build Lot 1 while investors would take over the other Lots.'”
4. “If the tollgate will bring development and good roads, I don’t see any problem with that except we are enemies of progress. It would help those of us who are into the transportation business because without motorable roads we cannot operate effectively.