Nigeria: Railway Projects in Limbo as Chinese Financing Dries Up

Financing gaps in the nation’s railway sector is almost $38 billion dollars even as the Chinese financing is drying up.

The Nigerian government is seeking alternative financing for her railway modernisation plan following an apparent drying up of Chinese loans and financial support, Minister of Transportation, Rotimi Amaechi has disclosed.

He said the President Muhammadu Buhari is leveraging alternative funding mechanisms to rehabilitate old rail lines and modernise the rail system according to its 25-year strategic vision. The minister did not disclose what those sources are.

It was reported some months ago that Nigeria is in talks with the Standard Chartered bank for railway financing. But details are still sketchy.

Financing gaps in the nation’s railway sector is almost $38 billion dollars even as the Chinese financing is drying up.

The minister noted that lack of fund has slowed down the nation’s railway modernisation projects necessitating alternative sources of funding for the national project.
Mr Amaechi said this on Friday during the 2021 Annual Public Lecture organised by the Department of Economics, Faculty of Social Science, University of Lagos, Akoka.

The theme of the lecture was ‘Nigeria’s National Rail Transport Project’.

”So far, the federal government has laid out plans for the construction of Lagos-Calabar at $11.1 billion, Ibadan-kano at $5.3 billion for single track and Port Harcourt-Maiduguri at $3.02 billion for the reconstruction of narrow gauge,” said Mr Amaechi. ”It earmarked $12 to $13 billion for standard gauge approved by the president with additional spurs, Abuja-Itakpe at $3.9 billion in addition to the central line; and Lagos-Ibadan completed at $2 billion.”

According to him, Mr Buhari’s regime has recovered most of the failed locations on the narrow gauge corridor and was also taking precautions in the Environment Impact Assessment (EIA) report on the standard gauge corridors.

He added that all the new railway projects contracts were embedded with rich technology transfer clauses, capacity building, and Conversational Skills Rating ( CSRs) domestic appropriate knowledge and skill.

The minister further explained that the establishment of rail projects was to reduce the cost of transportation and boost the economy since economic activity drives development in any country.

He added that the project would connect all the regions in the country with rail transportation but for lack of sustainable funding plan, environmental issues, degenerated infrastructure, theft of railway materials, and obsolete legal framework.

According to him, the railway project is affected by the decline of requisite railway professionals, indiscriminate disposal of the refuse on railway right of way by citizens, among others.

The minister then appealed to community leaders and civil society organisations to join in the fight against the vandalisation of railway infrastructure across the country.

In a statement on Friday, Mr Amaechi added that rail projects were built for economic growth, not ethnic biases.

He identified “politicising railway” development as one of the major challenges hindering the government’s effort to stimulate the economy.

Speaking as a guest lecturer at the Annual Public Lecture of the Department of Economics at the University of Lagos, the minister added that transportation was responsible for driving nations’ economies.

”It is a key element in driving the development of economies all over the world, and it creates possibilities for other sectors; therefore, you can’t even create employment if you don’t create logistics,” he further explained. “Nigerians are too ethnically conscious. You think first as your ethnicity before you think as a Nigerian. Ethnicity is putting pressure on the economics of railway construction. What you hear is, ‘I’m a Yoruba man, I’m an Hausa man, I’m an Igbo man.”

Mr Amaechi pointed out that “the Yoruba man is happy that we have done Lagos-Ibadan,” and the moment “you do railway up to Enugu, the Igbo man would be happy.”

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