Railways are economic lifelines, providing an efficient means to transport people and goods while boosting growth. In Nigeria, former President Muhammadu Buhari aimed to tap into this potential by investing billions in rail infrastructure.
However, the outcomes remain disappointing. A deeper dive reveals why these projects failed to deliver the promised economic benefits and how the situation could be salvaged.
Big promises, patchy results
In July 2018, Buhari inaugurated the Abuja Light Rail, a $823 million project hailed as West Africa’s first urban light rail system. The plan was to connect Abuja’s city center to the airport, ease traffic congestion and stimulate economic development. However, soon after its launch, the project faced multiple setbacks.
In March 2020, the service was abruptly halted to curb the spread of the coronavirus. The system continued to face significant operational challenges. The situation worsened in March 2022 when a horrific massacre occurred at Katari, Kaduna State, resulting in the death of eight passengers, the injury of 41 others, and the abduction of several passengers.
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The survivors were eventually freed months later, but the incident led to another suspension of the service.
Subsequently, the trains were left idle in depots, and stations were abandoned. Vandalism soon took over, with thieves stealing essential equipment like copper wiring and communication cables. Rowland Ataguba, an adviser on rail strategy at the time, succinctly described the situation as “an abandoned project.”
Even when the service finally returned in May 2024 after a nine-month renovation, the sector continued to face difficulties. Despite a 14 percent increase in passenger revenue by the third quarter (Q3) of 2024, the railway’s cargo transportation revenue experienced a sharp 33 percent decline, dropping from N3.3 billion to N2.2 billion compared to the previous quarter.
This highlights the untapped potential of the rail network and the challenges it faces in fulfilling its role in Nigeria’s economy.
Economic viability: Costs, delays, usage
Nigeria’s railway sector has been plagued by rising costs, persistent delays, and underutilisation. The Lagos-Ibadan rail line, for example, cost more than $1.5 billion to complete, raising concerns about its cost efficiency.
In contrast, Ethiopia’s Addis Ababa-Djibouti Railway, a similar project completed in 2018 with a $4 billion investment, serves as a model of effective planning and successful implementation.
The Addis Ababa-Djibouti Railway drastically reduced freight travel times from 50 hours to just 10 hours, moved millions of tons of cargo, and generated $502 million in revenue. The success of Ethiopia’s railway can be attributed to clear planning, private sector involvement, and strategic partnerships.
By contrast, Nigeria’s projects, such as the Abuja Light Rail, have faced significant planning flaws. Originally projected to carry 34,000 passengers daily, the Abuja Light Rail has struggled to even reach 1,000 passengers on average, indicating a serious mismatch between infrastructure and demand.
Additionally, prolonged delays due to bureaucratic inefficiencies and funding shortages have led to inflated costs and a loss of public confidence in the government’s ability to deliver essential infrastructure.
Passenger rail traffic saw some growth, with a 25 percent year-on-year increase in Q3 2024, largely driven by improvements in security. However, the continued underperformance in cargo transport—marked by a 33 percent quarterly decline, according to data from National bureau of statistics (NBS)—underscores the underexploited potential of rail to reduce the strain on Nigeria’s overburdened road network.
More so, some rail decisions were not taken on economic grounds under Buhari. The Kano-Maradi railway, which costs $1.9 billion, is an example. Nigeria’s export to Niger Republic is less than 10 percent and President Buhari said in 2021 that he has his first cousins in Niger. Maradi is in Niger Republic.
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“Buhari’s administration was characterised by tribalism and nepotism, which he did not even hide,” said Ike Ibeabuchi, an emerging markets expert.
“While he ignored certain parts of Nigeria in his rail initiative, he preferred his second home, Niger Republic, which has little economic value to Nigeria.”
Comparisons with successful rail systems
To better understand where Nigeria’s rail ambitions have fallen short, it’s instructive to look at countries with more successful railway systems. Ethiopia’s Addis Ababa-Djibouti Railway provides a striking example.
Completed on time and within budget, the railway connects Ethiopia’s landlocked capital to the Port of Djibouti, handling 90 percent of the country’s international trade.
Funded largely by China, this project succeeded due to private sector involvement, strategic partnerships, and clear planning—elements that have been notably absent in Nigeria’s rail projects. Since its launch, the Addis Ababa-Djibouti Railway has transported over 677,000 passengers and 9.47 million tons of freight, generating significant revenue.
“The difference between Ethiopia’s success and Nigeria’s struggles underscores the importance of private sector participation, efficient planning, and alignment with the real transportation needs of the country,” an economist said.
Salvaging Nigeria’s rail investments
To revitalise Nigeria’s rail sector, experts argue that the Nigeria Railway Corporation (NRC) Act, which currently grants the government a monopoly, must be reformed. Opening the sector to private investment could provide the much-needed capital and expertise to modernise the rail network.
A report from Nigeria’s Ministry of Transportation emphasises the importance of implementing robust maintenance strategies to ensure the long-term viability of the infrastructure. Past failures to maintain systems have been a key factor in the inefficiencies seen in the rail sector.
Sa’idu Ahmed Alkali, minister of transportation, has prioritised the expansion and modernisation of railway infrastructure as part of his efforts to revitalize the sector.
Private sector involvement, similar to what Ethiopia has achieved, could also help. The Addis Ababa-Djibouti Railway’s success was largely due to partnerships with private firms and foreign investment, which helped to avoid the delays and cost overruns that have plagued Nigeria’s projects.
Additionally, providing incentives for businesses to use rail for freight transportation could help reduce road congestion and lower logistics costs. The Addis Ababa-Djibouti Railway serves as a model, showing how rail can be a more efficient means of moving goods, thereby increasing overall economic efficiency.
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Future rail projects in Nigeria should prioritize connecting densely populated areas and economic hubs, ensuring that the infrastructure aligns with actual demand. Learning from Ethiopia’s approach and addressing the shortcomings in Nigeria’s own system could unlock the full potential of the country’s rail sector.
“It goes without saying that security and the role of technology in keeping passengers safe will continue to be a big issue. This is particularly true when it comes to earthquakes,” said the International Organization for Standardization.
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