April 18, 2023/CSL Research
Based on recent data by National Bureau of Statistics (NBS) from Nigeria Railway Corporation (NRC), the number of rail transport passengers in Q3 2022 was 500,348, lower than the 696,841 reported in the corresponding period of 2021, representing a decline of 28.20%. In Q4 2022, the number of passengers rose by 30.10% to 1.34 million persons from 1.03 million persons in Q4 2021, while the volume of goods transported decreased by 1.50%. Revenue generated from passengers was N1.15 billion, a decrease of 39.54% from the same period last year.
The huge rail infrastructural deficit in Nigeria over the last 30 years has been of concern, as over-reliance on road haulage has also led to faster dilapidation of roads, while the truck movement of cargoes is a major factor behind the very high cost of cargo clearance from Nigeria’s ports. The topography of the country supports an efficient and sustainable rail infrastructure; yet since the decline and obsolescence of the rail infrastructure built during the colonial era, the Nigerian Railway Corporation (NRC) has been largely moribund and ineffective, existing mainly as a property leasing agency in respect of the landed property owned by the corporation.
However, the intensified effort of the government seems to be changing the narrative, supported by recent investments in the rail line, such as the Abuja Light Rail, Abuja-Kaduna, Lagos-Ibadan, IbadanKano. The impact of these recent investments and the gradual recovery of the economy from the covid induced recession in 2020 must have supported the strong performance witnessed in the sector in Q1 2022. Specifically, the rail transport sector grew by 124.54%y/y in Q1 2022, the highest on record. However, it appears that recent issues of insecurity have overturned the positive trajectory.
Railways are a climate-smart and efficient way to move people and freight and promote economic growth while cutting greenhouse gas emissions. They are a clean and compact way to move millions of passengers and millions of tons of goods across countries. That said, the high level of Insecurity that in the country is fast becoming a major bottleneck to patronage despite the current administration’s efforts to integrate rail transport into the Nigeria transportation system. Recent attacks on the Abuja-Kaduna rail line leave a lasting fear in the minds of many Nigerians.
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