Lagos-Ibadan Railway Commences: A Sigh of Relief!


Friday, December 11, 2020 / 09:49 AM / by FDC Ltd / Header Image Credit: Channels TV

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After so many years of talk and little or no action/results, the Lagos-Ibadan rail-way has commenced commercial operations 7 ahead of its commissioning in January 2021. The project ($1.6bn) was one of many that started in 2006 but just like all the other abandoned projects, lack of funding and commitment remained the dominant issues to its implementation. The railway has significant implications for the government, consumers, manufacturers, real estate values and rents.



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Scenario 1: Proper Implementation and Maintenance

On the premise that the railway project is well implemented and maintained over the years, it would be a huge attraction to investors. It could also increase the IGR of Lagos & Ogun states. There would be a boost in job opportunities which will in turn taper unemployment and poverty levels. The value of properties around the rail line is likely to increase significantly and spur more businesses within the areas. This could lead to rapid development and improved standard of living.


Scenario 2: Poor Implementation and Maintenance

If this happens, it would just be another addition to the over 12,000 abandoned projects in Nige-ria. It will douse the expectations for the project as a means of job creation and improvement to the business environment. Higher commodity prices, logistics & transport costs and supply chain disruptions could continue. Investors would remain skeptical and development in areas around the rail line will slow.


In summary, this project, if well maintained and managed is an opportunity for the government to boost economic development and improve the business environment. We therefore advise the government and all regulatory bodies involved to ensure efficient and effective use and management of the railway.

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