• Wednesday, April 24, 2024
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BusinessDay

Railway debt servicing outpaces revenue by 1,150% in one year

Passenger, cargo traffic surge as railway corporation generates N1.49bn in Q3 – NBS

Nigeria spent more servicing the debt it took to build its rails than the amount its railway made in 2023.

The country spent 1,150.97 percent more on railway debt servicing than it made from revenue from rail services in the year. Total revenue from rail services amounted to N6.07 billion in 2023, according to data from the National Bureau of Statistics (NBS).

Passenger revenue totalled N4.43 billion, N1.08 billion was made from goods/cargo, and N565.84 million was from other income sources. Total revenue for 2023 was 8.5 percent higher than the N5.59 billion made in 2022.

In the same year, the government spent $77.69 million (N69.88 billion at N899.39/$) on servicing debt for loans obtained to build the Nigeria Railway Modernisation Project (Idu Kaduna Section) and the Nigeria Railway Modernisation Project (Lagos – Ibadan Section).

While revenue jumped in 2023, interest in rail seems to be waning. Total passengers, reflected in lower income, fell to 2.18 million from 3.21 million. However, using rail for cargo travel is gaining ground. The volume of goods/cargo increased to 317,244 tons from 157,024 tons.

“However, on an annual basis, the number of passengers in 2023 fell by 32.08 percent compared to the previous year. The revenue received from passengers declined by 2.64 percent in 2023, while volume of cargo and revenue from cargo rose by 102.04 percent, and 144.32 percent respectively relative to 2022,” the NBS said.

Declining revenue from railway services has been blamed on insecurity and ticketing issues. The House of Representatives recently decried low revenue generation from the Nigerian Railway Corporation.

A member of the house, James Faleke, said, “Our concern is that if we expect so much revenue from NRC and we aren’t getting it, then there is a problem.

“I think we should take the decision that the railway should self-fund and take care of their costs and remit to the government the surplus.”

The Minister of Transportation, Saidu Alkali, recently stated that e-ticketing would boost railway revenue in the country.

He said, “The essence of e-ticketing is to make it easy for our passengers to buy tickets, for security purposes, and to stop ticket racketeering. It will also ensure the security of our passengers onboard the train and avoid racketeering.”

Not much is expected to change as, according to media reports, the Federal Government only intends to make N7.01bn from train passengers in 2025.