Nigeria’s transportation infrastructure continues to fall short of its potential, with the rail sector accounting for less than half a percent of the transport sector’s contribution to the country’s GDP. This is an astonishingly low figure for a nation grappling with a spiralling inflation crisis, mounting logistics costs, and an overburdened road system. While rail transport is widely recognised as the most efficient and cost-effective solution for moving large volumes of goods, Nigeria has yet to fully harness the power of its railway infrastructure.
Globally, the transformative role of railways in economic development is well-documented. The United States, for instance, saw its railroads revolutionise the movement of goods across vast distances in the 19th century, accelerating industrialisation and economic integration. Similarly, in Europe and parts of Asia, rail infrastructure remains a pillar of economic efficiency. Yet, in Nigeria, rail transport remains woefully underdeveloped — a puzzling neglect in a nation with immense economic potential.
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Nigeria’s rail network was established during the colonial era, primarily serving British interests. Rail lines such as the Lagos-Kano route were designed to facilitate the extraction of raw materials, connecting resource-rich hinterlands to ports for export to Europe. This infrastructure, while transformative in its time, was geared towards the needs of the colonial economy, not the development of internal markets or industrial growth.
Post-independence, efforts to reclaim the railways as a national asset have been sporadic and largely insufficient. Successive administrations have touted the benefits of a modern rail network, yet practical progress has been slow. While President Muhammadu Buhari’s administration made some headway with the completion of key projects such as the Abuja-Kaduna and Lagos-Ibadan lines, these efforts have failed to catalyse a significant shift in freight transport from road to rail.
Nigeria’s road transport system, heavily reliant on diesel-powered trucks, is increasingly unsustainable. Diesel prices have soared by over 64 percent between August 2023 and 2024, contributing to rising inflation and driving up the cost of goods. The Central Bank of Nigeria (CBN) has acknowledged the profound role that energy costs play in the country’s inflationary pressures. Despite this, there has been little in the way of policy to alleviate these pressures by focusing on alternative modes of transport.
“Despite this, there has been little in the way of policy to alleviate these pressures by focusing on alternative modes of transport.”
Rail transport offers an obvious solution. Freight costs by rail are significantly lower than by road, yet the sector remains underutilised. Recent data shows that Nigeria’s railways moved just 260,000 tons of cargo in 2024 — a modest improvement, but one that pales in comparison to other African countries. South Africa, for instance, transports over 100 million tons annually, while Kenya moved 5.2 million tons in the same period. These figures are a stark reminder of how much Nigeria lags behind.
The benefits of shifting freight transport from road to rail extend far beyond cost savings. An efficient rail network would reduce the strain on Nigeria’s overburdened roads, which are prone to accidents, extortion, and armed robbery. More importantly, it could help mitigate the inflationary pressures currently squeezing the economy by reducing transportation costs for goods, particularly in the agricultural sector.
Nigeria’s underdeveloped rail system has far-reaching implications for industrialisation. By failing to connect production centres with consumption hubs, the country is missing a vital opportunity to enhance productivity and economic efficiency. In agriculture, for example, post-harvest losses are estimated to reach 50 percent, largely due to inadequate transport infrastructure. USAID reports that these losses, driven by poor logistics and delays in transporting goods to market, are a major contributor to food insecurity and inflation. A robust rail network could address these issues, helping to stabilise food prices and increase food security.
Buhari’s administration made some strides in reviving the rail sector, introducing reforms such as e-ticketing and launching rail freight services. However, these initiatives have yet to deliver the transformative economic impact that is so desperately needed. Nigeria’s rail projects, while important, are still too limited in scope. Without a comprehensive strategy to connect the country’s production centres to its economic hubs, the benefits of rail transport will remain out of reach.
To realise the full potential of its rail system, Nigeria must turn to strategic partnerships with the private sector. Rail infrastructure is capital-intensive, and the government cannot shoulder the burden alone. Private sector involvement, both domestic and international, will be crucial to financing, developing, and operating a modern rail network. This model has been successfully implemented in other parts of Africa, with private investors playing a key role in upgrading rail systems and enhancing their efficiency.
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Looking ahead, President Bola Tinubu’s administration has an opportunity to shift the narrative. The recent reopening of the Abuja Light Rail, after years of delay, is a step in the right direction, but it must be followed by more ambitious policies aimed at connecting Nigeria’s rail system with its key economic sectors. Investments in rail must move beyond symbolic projects and focus on creating a network that can drive industrial growth, reduce inflation, and ease the burden on the country’s overstretched roads.
The ongoing neglect of Nigeria’s rail infrastructure represents a critical missed opportunity for economic revitalisation. While the government has made some progress, much more needs to be done to unlock the full potential of the rail sector. With inflation spiralling, food prices rising, and transport costs increasingly unsustainable, Nigeria can no longer afford to sideline its railways. Strategic investment in the rail sector, backed by private sector partnerships, could be the key to stabilising the economy and paving the way for long-term growth.
The time to act is now. Nigeria’s railroads are not just a relic of the past; they could be the foundation of a more prosperous future.
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