Economic Recovery and Increased Investment to Support Rail Infrastructure

Proshare

Friday, September 10, 2021 / 3:23 PM / By CSL Research / Header Image Credit: Nairaland

 

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.

 

That said, 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, Ibadan - Kano. The impact of these recent investments and the gradual recovery of the economy from the covid induced recession last year must have supported the strong performance witnessed in the sector in Q2-2021. Specifically, the rail transport sector grew by 53.3% y/y, the highest on record, as cargo and passenger volume increased by 392.4% y/y and 442.4% y/y.

 

Despite the recent improvement in the sector, funding remains a major bottleneck, as many rail projects are suffering a delay in completion due to a lack of funds. In our view, the government needs to revisit the Public-Private Partnership (PPP) model. We expect the InfraCo fund to provide a viable midpoint between public funding and private finance for major infrastructure projects in Nigeria, including future rail projects.


Proshare Nigeria Pvt. Ltd.

 

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


Related News

  1. 563,385 Passengers Travelled Via Rail in Q2 2021 - NBS
  2. 424,460 Passengers Travelled Via Rail in Q1 2021 - NBS
  3. FG Signs MoU on the Kano-Maradi Railway Infrastructure Project
  4. Lagos-Ibadan Railway Commences: A Sigh of Relief!
  5. 723,995 Passengers Travelled Via Rail in Q1 2019 - NBS
  6. The Unsustainable Operations Of Nigeria’s Rail Sector
  7. Transnet, Standard Gauge Rail and Nigerian Railway Concession
  8. 730,289 Passengers Travelled via Rail in Q2 2018 - NBS
  9. Rallying For Railways in Nigeria
  10. Rail Transport on the FGN’s Agenda


Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP