In 2015, just eight years ago, Nigeria had no trains operating on standard gauge railway tracks.
The country was criss-crossed by a network of narrow gauge rail lines laid down in the colonial period. For several decades Nigeria’s rail network was made up of a few functioning but gradually decaying lines, ld, slow and uncomfortable trains a few of which crossed vast distances on aged tracks that had not been serviced for years. The picture is changing today.
For the first time since independence Nigeria has an expanded rail service with new routes and destinations and the government has embarked on a long-term revival programme to develop an integrated rail to port transport network through its investment in the Standard Gauge rail lines across several corridors. Part of the aim is to extend Nigeria’s rail link to new commercial hubs and open access to the country’s vast resources. The advances recorded so far have been made possible by the committed
effort of Rotimi Amaechi as Minister for transport before his resignation in September 2022. Amaechi needs no introduction within political circles in Nigeria. His reputation for frank-talk and an unyielding demand for him and those he represents to be treated fairly, made him one of the most controversial figures to be selected to serve in president Muhammadu Buhari’s cabinet. As a former two term governor and two-term state House of Assembly Speaker as a then member of the Peoples Democratic party (PDP) in the oil rich Rivers state,
Amaechi recorded some impressive feats but it is his tenure as Minister of Transport on the ticket of the
All Progressive Congress (APC) that has enhanced his reputation as one of the key figures in the
revival of Nigeria’s rail services His responsibility included oversight as well as initiation of the construction and maintenance of rail and maritime infrastructure. Anyone who has conducted a proper study of public office in Nigeria would admit that Amaechi represented a bold departure
from the conventional behaviour of many of his predecessors. His utterances were simple and candid,
intending to make his points as lucid as possible. He appeared to have drawn on experiences gained from
his previous roles in public office to oversee what has turned out to be one of Nigeria’s most celebrated
development stories. Throughout his time as minister, Amaechi behaved like one undaunted by the enormity of the task that he was entrusted with. In seven years Nigeria’s previously moribund rail sector evolved into one of the major success stories of the Buhari administration. It was notable that Amaechi held the portfolio of Minister of Transport longer than many of his colleagues in the cabinet held their own portfolios, almost running the full eight-year tenure of the government. The transport sector is one of the most vital in the government’s plan to revive the country’s economy. Although confronted with a substantial deficit in logistical infrastructure, the government set out to revive the railway service to reduce the cost of development across the board and to ease the pressure of haulage activities on Nigeria’s vast highway network.
THE EFFECTIVENESS OF RAIL PROJECTS
Amaechi’s first assignment in this programme was the completion of the 186 km Abuja-Kaduna railway line, linking the country’s capital city and one of the largest and most important commercial and industrial centres in Northern Nigeria. The route was started by the previous government but not completed. Under his mandate the Ministry took over the task of completing the project in 2015 and superintended the construction of the rail stations, installation of signalling and communication equipment and the laying of some sections of the tracks. The Abuja-Kaduna service operations commenced in July, 2016.
The plan for the rail network on the Abuja-Kaduna axis included building facilities that would support projected growth in rail cargo deliveries, which the minister said would address the problems of inadequate access to seaports and remove frequent congestion, He also said that them expansion of rail services was expected to provide opportunities for cargo delivery which would result in the prevention or reduction of the loss of cargo in transit through road accidents. With an estimated 673.5 kilometers of standard gauge lines built already, and trains that run at average speed of 130km/hour, rail transport is gradually becoming a vital part of a new diversified transport sector boosting investment in Africa’s most populous nation.
The objective is to cut the time and the spiralling cost of transporting goods and people around the country and making travel safer. In addition, there is the ripple effect of a boost in property values around railway stop points. Freight costs are also estimated to be reduced significantly, and with every train estimated to take 500 trucks off the roads, there will be a significant reduction in pollution, congestion, and pressure on road infrastructure and accidents on the highways. Rail lines are being proposed across
new corridors and while the new network will include some of the lines that were part of the old colonial
grid these will be modernised. An upgrade of the NGR track that links the south-east of the country to the
northeast, and a standard gauge link between the west and east coast, are vital elements of the rail projects that the government has embarked on.
The Buhari government said that the rail infrastructure programme is based on a 25-year Strategic Vision plan that will include the rehabilitation of the existing narrow gauge lines simultaneously with the development of standard gauge lines. All major rail projects that were inherited from previous administrations have been completed and are functional. The Abuja Metro Rail and the 186km Abuja-Kaduna Rail, and the 327km Itakpe-Ajaokuta Warri Rail, started in 1986, were completed in 2020. The Abuja Kaduna line will eventually be linked to the 157km Lagos-Ibadan Standard Gauge Railway, with a 7km extension to the Port in Lagos, funded by the Export Import Bank of China. In February 2021, work was flagged off on a $2bn internationally-funded rail line connecting Kano, the largest city in northern Nigeria, to Maradi in neighbouring Niger Republic. The project is the outcome of a feasibility study done in 2013 that would improve transportation along an extensive sub regional commercial corridor. Work has also started on a $3bn renovation of the railway line connecting the country’s southeast, starting at the oil-rich Port Harcourt, and the northeast, terminating in Maiduguri. Nigeria’s rail network is expected to double in length by the end of 2023 with the construction of several other lines that would extend existing routes, including a line that would eventually connect Nigeria’s two main commercial centres of Lagos and Kano. This stretch will include the Lagos-Ibadan and the Abuja-Kaduna axis in a 1,367km rail link between the southwest, north-central and northwest of the country.
The Lagos-Ibadan new double standard gauge rail line also demonstrates a commitment to improve ease of doing business. On January 25, 2021, China Civil Engineering Construction Corporation, builders of the $1.6bn Lagos-Ibadan railway project, announced that it had linked the rail tracks on this line to the Apapa port, a development that would boost agrobusiness investments in Nigeria’s southwest with a reduction in the cost and time of hauling crops from the farms in the interior to the port in Lagos for export.
FINANCING THE RAIL PROJECTS
Finance remains one of the biggest challenges for the 25-year strategic plan. Nigeria intends to spend
tens of billions of dollars on its rail network in coming years. With $5bn worth of projects flagged off in 2022 alone, the country must look for funds to sustain the current pace of development. As minister Amaechi had always said that the only hindrance to him linking the country by rail was funding. “If we had
the money, I would want to be the minister that initiated and completed the linking of Nigeria. All I need is $36bn”, he once said. Amaechi carried out extensive consultations to find the funds for a number of railway projects lined up for construction. In a report it released in November, 2021, Moody’s Investors Service said Africa’s largest economy will need at least $3 trillion over 30 years to close its infrastructure deficit or funding gap. Nigeria’s poor Global Competitiveness Index ranking of 116 out of 141 countries in 2019 by the World Economic Forum was largely a result of the poor state of its infrastructure at the time.
The government has had to contend with paucity of funds and this has not been easy. Rotimi Amaechi, who resigned as the Transport minister in mid-2022 in order to be qualified to contest for the presidential ticket of the APC was the driving force behind the revival in the sector. He often pointed out that some of the projects were facing delays due to lack of funds, but he was always hopeful that the government would find funding alternatives. There were reports that the government commenced negotiations with the British Standard Chartered Bank to find a funding alternative to China where it had previously sourced most of its loans totalling $3.4 billion for the projects. The quest for credit has not been without its critics who have expressed worries that this could subsequently place a heavy burden on the country’s economy. Some suggest that the government’s search for new loan sources indicates its inability to meet obligations to repay its debts. The government sought to initiate a different approach to close the financial gap by attempting to source funds through a Public Private Partnership (PPP) arrangement in
order to ease its financial burden by reducing its reliance on loans. This initiative has however been stalled
by Nigeria’s Railway Act, drawn up in 1955, which does not encourage the PPP strategy.
This is one of the major obstacles to the establishment of a fully functional modern railway system in the country as it restricts the participation of the private sector and limits the introduction of innovative concepts. The legislature has, however, commenced efforts to rectify this. But until the act is amended, the Nigerian government can only seek finance from the private sector but must be the exclusive administrator. Funds are coming in through various financial arrangements. In February, 2021, the Infrastructure Company (InfraCo) was established. InfraCo is a publicprivate infrastructure fund with N1 trillion ($2.6bn) in seed capital from the Central Bank of Nigeria, Nigeria Sovereign Investment Authority (NSIA) and the Africa Finance Corporation (AFC) a mostly privately owned Pan-African project finance firm. InfraCo is expected to raise N15 trillion to support investment in critical infrastructure through its mandate to ‘finance public asset development, and rehabilitate old assets and construct new ones’.
BUILDING A PAN AFRICAN LINK
Bringing the sector in line with modern realities is one objective that was clearly on the agenda of the Buhari government, and this included encouraging the rail sector to boost intercontinental trade.
Nigeria’s railway modernisation drive is part of a National Integrated Infrastructure Master Plan (NIIMP),
which should be incorporated into a wider continental rail system to boost trade. While flagging off the
$1.96 billion Kano (Nigeria)-Maradi (Niger Republic) rail line in February, 2021, President Buhari said that the project would enhance import and export trade between Nigeria, Niger Republic and other neighbouring countries when completed in 2023.
This rail link is intended to diversify Nigeria’s revenue sources by enabling its railway infrastructure to provide easy access for logistical services from Niger. Buhari mentioned at the flag-off that the completion of the rail link would create a regular logistic supply chain in railway transport services between the north of the country and the ports in the south. He added that “The country would
earn revenue through expansion of trade and commerce, while the people of Niger Republic will benefit
from ease of transportation logistics at affordable cost in their import and export business, while pointing out that “…The entire route encompasses territory inhabited by close to 80 million people across 10 states of the country”.
An important fact about this project is its potential to considerably boost the movement of passengers and freight, especially agricultural and mineral resources for industries, both in Nigeria and the Sahel region. The growth in trans-Sahara trade and the projected gains for the African Continental Free Trade Area (AfCFTA) will be considerable. Some criticism greeted the government’s decision to prioritise this project, from those who believed that greater urgency should be paid to developing other infrastructures that would require less financial investment. What these critics ignore is that an international rail line between Nigeria and Niger Republic would give Nigeria access to a major logistics sector for an economy with a Gross Domestic Product (GDP) value of $13.6 billion and an export market valued currently at $852 million, with no direct access to the sea.
The Nigerian government intends to cash in on the logistics market in this axis. Linking Nigeria’s railway network with other ECOWAS countries is also a future goal of the railway project, and the Maradi line is intended as a springboard for the country to position itself as a major export hub for the West African Sahel market.
AMAECHI’S HANDLING OF RAILWAY GROWTH: LESSONS LEARNT
Even with the gains recorded, it is obvious that government must cope, for some time, with developmental challenges such as inadequate funding, and operational challenges such as insufficient locomotives, coaches and wagons leading to congestion if it is to revive the rail system and enable it to develop into a viable organ of economic growth. These are the natural consequences of such paradigm schemes arising from the deficiencies of their origin. Minister Amaechi recognised these defects and set about confronting them with characteristic boldness of spirit and innovative methodology.,
Whoever takes over from him in subsequent Administrations would do well to study his approach to
managing the mandate entrusted to him if there is to be continuity in implementation of the rail initiative
for the future. Security is a serious consideration that many say the government must find ways to
control if the railway development is to be sustained and there were some serious security breaches during Amaechi’s tenure. In October, 2021, an explosion damaged coaches on a passenger train on the Abuja-Kaduna line but there were no casualties. In February 2022 one person was killed when suspected kidnappers attacked a railway cross-point from the steel industry town of Ajaokuta to the ore mining town of Itakpe.
These incidents were followed later by the Abuja – Kaduna terror attack in which several people died and dozens of hostages were abducted and held captive for several months. In spite of these the rail initiative has been relatively safe and successful and the Minister ensured the restoration of the affected services with increased protection for passengers.
Some other major challenges that the government must address are the replacement of obsolete machinery and workshop equipment. Access has been provided to only two seaports and none to airports as yet thus limiting commercial opportunities.
If the new Administration decides to implement this far-reaching initiative as an integral part of its development policy several important lessons will be learnt from careful scrutiny of the Amaechi initiatives.