Rail Transport on the FGN’s Agenda


Tuesday, November 14, 2017 8:45AM / FBNQuest Research

Drawing on data provided by the Nigerian Railway Corporation, the National Bureau of Statistics (NBS) has released its maiden report on railway passenger traffic. The report estimates total traffic in Q2 2017 at 596,792 passengers, representing decreases of -22% q/q and -20% y/y.  Although increased efforts have been made by the FGN to improve rail transportation, infrastructural deficit still exists. The federal ministry of transportation projects a total of US$36bn to complete railway connectivity across the country.

There was a total of 1,866 trips (passenger and freight) by rail in Q2 compared with 1,755 trips recorded in Q1. The Lagos mass transit train service (from Iddo/Apapa to Ijoko) recorded the highest number of passengers – 427,760 in total. Meanwhile, the Minna to Kaduna train service route recorded the lowest passenger traffic, just 573.   

Logistics have been cited as a drawback within the agriculture value chain as supply of farm products to end-users remains a challenge. During the period of review, freight traffic via rail recoded a total of 16,159 tons, with fertiliser accounting for 44% of the total while animal feeds represented only 3%.

We understand that the FGN plans to inject over 100 cargo trains into the rail transport system to boost product distribution across the country. Additionally, the government has secured a loan of US$1.5bn from the China Exim Bank to complete the construction of the Lagos-Ibadan railway network route. 

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Rail is not particularly popular in Nigeria when compared with other transport options. But it is necessary that the government continues to invest in / attract investment into the network. Although rail is unlikely to change the behaviour of certain segments of the population, it will reduce the burden on the road network, especially from heavy duty goods. 

Proshare Nigeria Pvt. Ltd.

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