At a time when Nigeria has been battling very difficult
economic challenges, Nigeria's Federal Government has proposed a flagship and
contentious infrastructural program; The Lagos-Calabar Coastal Highway. Given
inflation above 28%, a debt ratio of 40% of GDP, and infrastructure deficits
across the board, the recent estimation of ?15.6 trillion ($12.5 billion at
current exchange rates) for the construction of this 700 kilometer coastal
superhighway signals an ambitious project at a difficult moment for the
country. This huge investment, financial and otherwise, is also being attempted
at a time when the entire country suffers from basic developmental problems
such as an ongoing energy crisis, subpar healthcare facilities, and a broken
education system, all of which should be receiving intensive and extensive
funding.
Given these economic circumstances, it is puzzling that our
money and attention should be directed to such a huge undertaking. Supporters
of the highway claim that it will open up huge economic opportunities by
linking the coasts, boosting trade and generating jobs, while critics argue
that the exorbitant investment could increase the national debt and take
resources away from more urgent and effective forms of intervention. This
debate points to a difficult equilibrium dilemma between a long-term
developmental vision narrative and the pressing necessity to alleviate the
immediate economic plight impacting massive swaths of the Nigerian population.
Project Overview: Scale and Specifications
The Numbers Behind the Vision
The Lagos-Calabar Coastal Highway is the single most
expensive infrastructural project on the African continent, with alarming
financial implications:
Total Cost of the Project: ?15.6Trillion ($12.5 billion)
Length: 700 kilometers of double-lane road
Cost per kilometer: N22.47 billion ($14.98 million) for
Phase 1 Section 1- over five times the national average of ?4 billion per
kilometer
Construction Period: Eight years (2024-2032)
The Federal Executive Council has approved phase 1
investment of a total cost of ?1.067 trillion to build a mere 47.47 kilometers.
Compensation Paid: Over ? 15 billion has been paid to
impacted property owners
Geographic and Strategic Scope
This highway will run through eight states, linking
Nigeria's most economically relevant southern corridor:
1. Lagos State: Commercial hub with a GDP of $136 billion
(2023)
2. Ogun State: Industrial gateway
3. Ondo State: Agricultural and oil-producing region
4. Delta State: Major oil and gas producer
5. Bayelsa State: Niger Delta heartland
6. Rivers State: Economic powerhouse with Port Harcourt
7. Akwa Ibom State: Emerging industrial center
8. Cross River State: A Tourism destination with Calabar as
the terminus
The route will be of concrete pavement construction, have
several interchanges, and updated toll technology to be utilized in a 5-10 year
period of revenue generation to recuperate the costs of construction.
The Economic Case: Potential and Promise
Quantified Benefits
Trade and Commerce Integration
The current volume of interstate trade along the coastal
corridor is 8.2 billion dollars per year
Expected 35% growth on trade flows once finished
Reduction in travel time from Lagos to Calabar from 12 hrs
to 6 hrs.
Expected reduction in freight cost of between 25% and 30%.
Employment Generation
Jobs from direct construction: 120,000 jobs over 8 years
Indirect jobs: 300,000 in ancillary industries
Full-time jobs for operations ' 15,000 jobs at completion
Multiplier effect ' each direct job creates an economic
opportunity of 2.5 more.
Potential Revenue from Tourism Nigeria's coastal tourism
only contributes $800 million per year, which is significantly lower than some
potential comparators:
Ghana (with less extensive coastline): $3.2 billion tourism
income
Kenya (of a similar level of development): $1.6 billion
Estimated coastal tourism in Nigeria: 400% growth in the
first 10 years after completion of the highway.
Strategic Infrastructure Value
Logistics and Supply Chain
Access to Lekki Deep Sea Port, a facility with a capacity of
1.2 million TEU when at full operation
Integration with the planned Bonny Deep Sea Port project
Improved efficiency of the distribution of petroleum
products
Less pressure on the Lagos-Ibadan corridor, which is
currently responsible for the movement of 60% of Nigeria's freight
National Security Implications
Increased coastal surveillance capacity
Quick response routes for security forces
Evacuation infrastructure for oil installations in an
emergency
Potential maritime emergencies of strategic value
The Opportunity Cost Crisis: Critical Needs Neglected
Power Sector: The Fundamental Bottleneck
To juxtapose highway spending with Nigeria's electricity
crisis:
Current Electricity Access Statistics (2024)
Electricity access: 62% of the population
Urban access: 95% (but major quality issues)
Access for rural areas: 40% (less than in previous years)
About 75 million Nigerians do not have access to electricity
Grid reliability: Average 10-12 hours daily supply in urban
areas
Rural areas: Often less than 4 hours daily supply
Economic Impact of Power Deficits
Manufacturing Capacity Utilization: 54% (primarily due to
power constraints)
Loss of productivity for SMEs: ? 2.3 trillion estimated
every year
Impact on healthcare: 40% of primary health centers are
inadequately powered
Disruption of education: 65% of schools in rural facilities
do not have electricity
Investment Needs vs. Highway Cost
It has been estimated, by the World Bank, that Nigeria's
power sector needs about $40 billion in investments
The highway budget of current ?15.6 trillion ($12.5 billion)
is 31% total power sector needs
Mini-grid solutions for rural electrification: $200 million
could serve 2 million people
The cost of the Highway would provide electricity to 125
million rural folks
Transportation Infrastructure Backlog
Crisis in the Existing Road Network. Nigeria has a total of
108,000 km of federal roads, with a maintenance backlog of ?12 trillion:
Lagos-Ibadan Expressway: 127 Km at 310 billion Naira for
reconstruction, and has a daily traffic volume of 275,000 vehicles
Benin-Sagamu Road: Main road for east-west connectivity
throughout the area, 95% in a state of disrepair
Enugu-Onitsha Highway: Economic artery of the Southeast,
needs ?1.2 trillion to be rebuilt
Abuja-Kaduna Road: A key route for security, requires an
investment of 800 billion naira
Rail Infrastructure Deficit- Nigeria has only 3,505 km of
rail network length, although the country is 923,768 square kilometers in size:
Rail density is at 0.38 kilometers per 100 square kilometers
of land (whereas in South Africa it is 2.0 km per 100 sq km).
Lagos-Kano railway: after decades of completion, only 60% is
operational
Expected cost to complete national rail network: $43 billion
This means that 29% of the national rail network could be
finished with the current highway budget.
Human Capital Emergency
Education Sector Crisis
Children out of school: 18.3 Million (world's highest)
Teacher shortage: Over 277,000 new teachers needed
Deficit in infrastructure- 60 per cent of the primary
schools lack basic infrastructure
The cost of annual ASUU strikes: Lost productivity of ?1.1
trillion.
Healthcare System Collapse
Doctor-patient ratio 1:5000 (1:1000 WHO)
Investment in healthcare infrastructure: $15 billion
Maternal mortality rate- 512/100000 live births
Functionality of rural health centers: 25% functional.
Environmental and Social Costs: The Hidden Price
Ecological Impact Assessment
Coastal Ecosystem Threats The highway's environmental
footprint extends beyond immediate construction:
Killing of Mangroves: 15,000 hectares of mangrove forest
threatened.
Disruption of marine life: Key fish spawning areas impacted
Beach Erosion: Increased rates of coastal erosion
Biodiversity Loss: Threat to the habitat of 23 endangered
species.
Landmark Beach Controversy The planned demolition of
Landmark Beach'Lagos's premier recreational facility, generating ?12 billion
annually'illustrates broader environmental costs:
2,000 employees are directly at stake
?45 billion of tourism revenue lost in 10 years
Destruction of cultural heritage
Shrinking public recreational space in overpopulated Lagos
Community Displacement and Compensation
Human Impact Scale
Humanitarian impact estimates: 150,000 People Displaced in 8
States
Affected communities: 89 communities
Remuneration structure: ?15 billion delivered to date
(approximately 12% of total requirement)
Legal challenges: 47 ongoing land acquisition court cases
Inadequate Consultation Process: Community engagement
metrics reveal systemic problems:
Number of public hearings held: 12 (average minimum of 45
for a project of this size)
Environmental Impact Assessment: English-only publication,
nearly 67% of affected groups excluded
Grievance mechanism: Existing in only 3 of the 8 states
affected
Financial Engineering and Transparency Concerns - Funding Structure Analysis
Current Financing Model
Federal Government contribution: ?1.067 trillion (Phase 1)
Private sector involvement: Hitech Construction Company
Limited (chosen in a non-competitive process)
Multilateral financing: $2.3 billion in loans requested from
multilateral lenders
Projected tolling revenue: ?450B in 10 years (best case
scenario)
Debt Sustainability Implications: Nigeria's debt profile
raises serious questions about highway affordability:
Public total debt: N87.4 trillion (39.8% of GDP)
Debt service to revenue ratio: 73.5% ( Sustainable IMF
threshold: 30%)
Highway project increases existing debt stock by 18%
Increase in annual costs of servicing this debt: ?2.1
trillion in 8 years
Procurement Transparency Gaps
Contractor Selection Process
Hitech Construction Company Limited was chosen via
'strategic partnership' rather than through any competitor tendering process.
Company's previous biggest project: ?89 billion (15 times
smaller than the current contract)
Due diligence records: Not accessible to the public
Performance Guarantees: Not found in public records
Comparative Analysis: Global Infrastructure Priorities
Regional Comparisons
South Africa's Infrastructure Approach
Modernizing the electric grid: $8.2 billion (2019-2024)
Maintenance of roads ahead of extension: 70% of the
transport budget
Resurgence of Rail Freight: A $4.1 billion investment
resulted in a 23 per cent modal shift
Ghana's Balanced Development
Targeted investment has led to electrification coverage of
87% in rural areas
Infrastructure focused on feeder roads connecting
agricultural zones
Development of ports: $1.5 billion expansion of Tema Port
that caters for regional trade
Cost-Benefit Analysis: Alternative Investment Scenarios
Scenario 1: Power Sector Focus ?15.6 trillion investment in electricity could deliver:
Universal basic electricity access by 2030
45% increase in manufacturing output
2.3 million new jobs in power-dependent industries
?8.7 trillion annual GDP growth contribution
Scenario 2: Rural Infrastructure Package
Rural 50,000 kilometers of roads: ?8 trillion
Rural electricity access for 40 million: ?4 trillion
1,000 primary health centers: 2 trillion naira
Agro-processing centers: ?1.6 trillion
Collective impact: 15 million people removed from poverty
Scenario 3: Education and Healthcare Investment
50,000 new classrooms: N5 Trillion Training
Recruitment of teachers: ?3 trillion
Nigerian hospital network: ?4 trillion
Overhaul of primary healthcare system: ?3.6 trillion.
Impact on human development: Long-term benefits that are
impossible to measure
Current Progress and Implementation Challenges
Construction Timeline Reality Check
Phase 1 Progress (As of May 2025)
Distance completed: 1.3 kilometers of first filling.
Expected length at completion in May of 2025 is 47.7
kilometers.
Updated estimate: 20 kilometers by January 2026.
Completion rate: 70%, one year late in the first year
Technical Challenges
Challenges in foundation engineering in coastal regions
Delays related to obtaining environmental permits
Community push back and litigation
Lack of skilled labor for specialized concrete construction
Quality and Standards Concerns
Construction Specifications
Concrete pavement technology: Not yet proven at a large
scale within the context of a Nigerian coastal environment.
Adequacy of the drainage system: Concerns by engineering
consultants.
Climate resilience: Few adaptation strategies to rising sea
levels.
Maintenance protocol: A 30-year life cycle has not been
established
Economic Context: Nigeria's Development Priorities
Macroeconomic Headwinds
Current Economic Indicators (2025)
GDP growth rate: 2.1% (below population growth of 2.6 %).
Inflation: 28.3% (32.1 % food inflation).
Unemployment: 33.3% (youth 53.4%).
Foreign exchange reserves are at $34.2 billion (covering 5.2
months of imports).
Depreciation of the Naira: 47% against the USD in 2024
Budget Allocation Disparities 2025 Federal Budget Analysis:
Infrastructure (highway inclusive): 23.4% (?15.8 trillion)
Education: 7.9% (?5.3 trillion)
Health: 4.6% (?3.1 trillion)
Electricity: 3.2% (?2.2 trillion)
Social support: 2.1% (? 1.4 trillion)
Development Index Performance
Nigeria's Global Rankings
Human Development Index: 163 out of 191 countries
Global Competitiveness Index: 116 out of 141 countries
Ease of Doing Business: 131 out of 190 countries
Infrastructure Quality Index: 142 out of 144 countries
These rankings indicate issues with basic infrastructure
development, which goes beyond just transport infrastructure.
Risk Assessment and Mitigation Strategies - Financial Risks
Revenue Projection Vulnerabilities
Assumptions of toll revenues based on an optimistic traffic
increase
Effect of recession on freight transport demand
Competitive better alternative routes
Currency devaluation of international loans
Cost Escalation Risks Historical Nigerian infrastructure
projects show average cost overruns of 67%:
Lagos-Ibadan Expressway: cost overrun of 89%
Abuja Light Rail: 156 per cent budget overrun
Second Niger Bridge: Increase in cost by 78%
Environmental and Climate Risks
Climate Change Vulnerability
Expected rise in sea level by 2100: 0.5-0.9 meters
Storm surge intensity may increase in coastal areas
Risk of flooding in the construction and operation
Climate change: 12.3 million metric tons of CO2 equivalent
over the length of construction
Social and Political Risks
Community Resistance Escalation
Legal battles may push the project back 3-5 years.
Compensation concerns regarding 67% of all identified
beneficiaries
Increase in environmental activism (12 major protests since
the announcement of the project)
Resistance to traditional rulers in 4 of the 8 states that
were affected
Alternative Development Pathways
Integrated Infrastructure Approach
Multi-Modal Transportation Strategy. Instead of a singular
highway focus, a comprehensive approach could include:
Lagos-Calabar rail line: ?6 trillion (more cost-effective
for freight)
Coastal waterway development: ?2.8 trillion
Airport network upgrade: ?1.2 trillion
Digital infrastructure backbone: ?800 billion
Total cost: ?10.8 trillion (31% savings with broader impact)
Phased Development Model
Priority-Based Implementation Phase 1: Critical Economic Zones (?4.5 trillion)
Lagos/Port Harcourt corridor (400 km)
Emphasis on industrial and port connectivity
Compatibility with current systems
Phase 2: Tourism and Development (?6.2 trillion)
Port Harcourt-Calabar extension (300km)
Strengthened environmental protections
Integrating community development
Phase 3: Future Enhancement (?4.9 trillion)
Integration of smart highway technologies
Adaptation infrastructure for climate
Efficiency of connectivity at the regional level
Regional and Continental Context
West African Integration
ECOWAS Corridor Development. The highway could have regional
integration objectives:
Link to the planned West African Coastal Highway
Linkage into the Eastern Corridor of Ghana
Support for the operationalization of the ECOWAS trade
protocol
Rolling out regional tourism circuits
Continental Trade Implications Under African Continental
Free Trade Area (AfCFTA):
Trade Potential between Nigeria and Central Africa: $12.4
billion
Coastal access is also a key strategy for Chad and access to
the CAR's market.
Connectivity to other Central African countries'
infrastructures
Comparative Regional Projects
East African Northern Corridor
Distance: 1,700 Kilometers (Kenya - Uganda ' Rwanda ' South Sudan)
Cost: $12.8 over 15 years
Method: Coordinating multiple countries, phased in
Results: 40% reduction on transport costs, 25% growth on
trade
Southern African Development Corridor
Multi-modal: road ' rail ' port integration
Private sector participation: 67 per cent of overall
investment
Community sharing benefit: 15% of toll revenues for local
development
Policy Recommendations and Strategic Alternatives - Immediate Action Framework
Enhanced Transparency Measures
Public access to all documentation related to the project
Cost-benefit analysis conducted independently by
international consultants
Community feedback quarterly reports on progress
The online dashboard for environmental monitoring in real
time
Community Engagement Overhaul
Community Development Trust Fund (5% of project cost)
Local Content Requirements: 60% Nigerian materials, 80%
Nigerian labor
Cultural Heritage Preservation Fund
Long Term Strategic Options
Option 1: Infrastructure Investment Rebalancing
Cut highway expenditure to ?8 trillion (Lagos - Port
Harcourt Phase 1).
N7.6 trillion for powering the economy.
Timeline: Complete power infrastructure, then back to the
highway
Option 2: Public-Private Partnership Restructuring
Govt contribution: Up to ?5 trillion.
Majority funding by the private sector: ?10.6 trillion.
The sharing of revenues was 70% private and 30% government.
Risk transfer: Construction and Operational risks to the
private sector
Option 3: Regional Development Fund Approach
Niger Delta Development Fund: 8 Trillion Naira investment
for 10 years
Integrated development: Roads, power, water, health,
education.
People's development paradigm, Highway as part of an
integrated package, instead of a standalone project
Future Scenarios and Projections
Optimistic Scenario: Project Success
Economic Outcomes (2032-2042)
Contribution to GDP growth of: 1.2% per year
Increase in regional trade: 45%.
Increase in tourist revenue: 2.8 trillion naira per year.
Creation of permanent jobs: 400,000
ROI: 8.3% over the past 20 years
Realistic Scenario: Mixed Results
Probable Outcomes
Expected to be partially finished by 2032 (Lagos- Port
Harcourt section).
Cost overrun: 65% final cost ?25.7 trillion)
Regional development effects: Average (urban areas and
cities)
Environmental concerns: The cost of court fighting and
restoration costs
Social acceptance: Slowly improving, also with economic
incentives
Pessimistic Scenario: Project Failure
Risk Factors
Economic crisis/project abandoned
Environmental disasters involving significant design
alterations
Escalation to violence of community resistance
Loss of international funding for ESG-related reasons
Instability in the continuity of projects due to political
instability
Conclusion: Toward Balanced Development
The Lagos-Calabar Coastal Highway epitomizes a double-edged
sword of development policy: a strategically vital project introduced at an
economically untimely moment. The highway will have long-term benefits in terms
of regional integration, ease of trade, and tourism, but in terms of immediate
relevance, it was not significant amidst the pressing issues of development for
Nigeria.
Key Findings:
Financial Commitment: The project amounting to ?15.6
trillion is equivalent to Nigeria's infrastructure budget for a period of three
years.
Opportunity Cost: Could provide electricity for all, connect
the rural areas, or change the way healthcare and education are implemented
Risks in Implementation: Technical, environmental and social
challenges point to a high likelihood of cost overruns and delays
Development Impact: Most of the benefits from this will be
channeled to already privileged urban coastal areas, possibly acting to
increase regional inequality
Recommendations for Policy Makers
Immediate Actions (2025-2026)
Pause and Review Project: Stop new phases until a thorough
independent assessment is conducted
Engagement of Stakeholders: Genuine consultation with
impacted communities
Restructuring: Renegotiate to limit government liabilities.
Environmental Compliance: Resolution of all environmental
and social impact issues
Medium-term Strategy (2026-2030)
Gradual Approach: Only invest at first in the Lagos-Port
Harcourt corridor (6 trillion Naira)
Parallel Investment: To Invest Simultaneously as much in the
power sector
Equity: Supplement complementary infrastructure spending in
non-coastal states
Cost Control and Impact Monitoring Systems: Strong systems
for control of costs and measuring impact
Long-term Vision (2030-2040)
Integrating Approach: Make the highway part of an overall
plan for regional development
Sustainability Focus: Climate adaptation and ecological
restoration
Fair and Equitable Benefit Sharing: Fair and equitable
sharing of the economic benefits
Continental Connection: To fit with the broader goals of
African Integration
Final Reflection: Vision vs. Pragmatism
Nigeria is up in the crossroads between imaginative
leadership and realistic governance. The Lagos-Calabar Coastal Highway captures
the dreams of the country to change and take the mantle of regional leadership.
Yet the chief of development policy can only succeed with a combination of both
vision and alignment with the existing realities so that mega infrastructure
initiatives may make immediate contributions and future investments in prosperity.
The road is bound to be constructed in the future, but the
question is whether it will be constructed intelligently and green, as well as
in tandem with the overall developmental needs of Nigeria. What decisions we
make now will decide whether this mega-project will become another vehicle in
achieving an inclusive growth or a shrine of false priorities.
After all is said and done, Nigeria requires the
Lagos-Calabar Coastal Highway. What it needs even more, however, is functional
electricity, good healthcare, available education and basic infrastructure.
What the leadership has to do is to ensure a balance between these competing
demands, and at the same time, not let one among the many projects underway
take the lead at the expense of the overall progress of the nation in meeting
its most fundamental development challenges.
The highway is symbolism of the future of Nigeria. The point
is whether its attempted implementation will show the wisdom of Nigeria.
