Analysis of debt service documents reveals that the cost of servicing debt for railway projects in the first half of 2023 exceeded the revenue of the Nigerian Railway Corporation (NRC) by a staggering 1,208.5 percent. During this period, the government spent $38.59 million (N29.98 billion at N777/$) on servicing debt for loans obtained for the Nigeria Railway Modernisation Project (Idu Kaduna Section) and Nigeria Railway Modernisation Project (Lagos–Ibadan Section). In contrast, the total railway revenue amounted to N2.29 billion, according to data from the National Bureau of Statistics,leadership reports.
Despite the financial challenges, the NRC reported that over 63,000 people benefitted from the free train rides provided by the federal government for yuletide travels between December 24 and 26. President Bola Ahmed Tinubu had declared free train rides across the country and a 50 percent discount on inter-state transportation.
In the first quarter of 2023, the rail system witnessed a 53.65 percent increase in passengers compared to the corresponding quarter of 2022, with 441,725 passengers recorded. However, revenue generation from passengers was lower at N768.44 million, down by 63.02 percent from the previous year. The NBS also reported an increase in revenue from goods/cargos in Q1 2023.
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In Q2 2023, the number of passengers increased to 474,117, and the volume of goods/cargo transported rose to 56,029 tons. Revenue from passengers during this period increased by 83.88 percent to N1.10 billion, and revenue from goods/cargos rose by 105.04 percent to N188.03 million.
Low revenue from railway services has been attributed to issues such as insecurity and ticketing problems, with paper tickets still prevalent in the country. The House of Representatives expressed concern about low revenue generation from the Nigerian Railway Corporation, attributing it to ticket racketeering.
The Minister of Transportation, Saidu Alkali, disclosed that the introduction of e-ticketing is expected to boost railway revenue, ensuring convenience, security, and eliminating racketeering. The NRC initiated the free train service from December 21, 2023, to January 4, 2024, with the federal government covering all associated costs.
The NRC MD advised passengers to obtain tickets online, emphasizing the importance of e-ticketing for passenger profiling and security. Despite these efforts, the MD highlighted challenges, including the ongoing vandalization of tracks, with over 50,000 clips vandalized on the Lagos-Ibadan rail line and a similar situation on the Kaduna-Abuja track.
