September 30, (THEWILL) – While Nigeria struggles to service the huge loan obtained to build and expand the railway sector, reports indicate that officials of the Nigerian Railway Corporation (NRC) have remained adamant in their notorious acts of revenue leakage.
Over the years, the railway sector has been a cesspool of corruption through ticket racketeering, diesel procurement scam and other malpractices.
Yesterday, reports revealed that the Federal Government has initiated an investigation into allegations of ticket racketeering on the Abuja-Kaduna rail route following numerous passenger complaints.
The Minister of Transportation, Saidu Alkali, who announced the directive on Sunday via a statement on his official X (formerly Twitter) account, disclosed that he had instructed Fidet Okhiria, the Managing Director of the Nigerian Railway Corporation (NRC), to establish a committee tasked with investigating the alleged issues and resolving them.
In the statement, Minister Alkali acknowledged the concerns raised by passengers regarding difficulties in purchasing tickets for the Abuja-Kaduna rail service.
He emphasized that the committee’s primary objective will be to review the entire ticketing process, focusing on identifying any negligence or mismanagement and ensuring those responsible are held accountable..
The Corporation’s leadership explained that the move is aimed at restoring public confidence in the railway system by improving transparency and efficiency in the ticketing process.
The ticketing process has proved to be infested with the virus of corruption in the old railway sector, enriching a few at the expense of the tax payers whose resources are committed to the servicing of the loans obtained to build or enhance the railway facilities.
Despite the convenience of the e-ticketing system, which was expected to be fraud-free, passengers have frequently raised concerns about difficulties in booking tickets through the platform. Many have reported that tickets sell out quickly, forcing them to resort to purchasing tickets at the station at higher prices.
.Allegations of ticket hoarding and racketeering have also surfaced, with some travelers accusing station officials of withholding tickets for sale at inflated prices, adding to the challenges faced by passengers seeking to book online.
These ongoing issues have sparked dissatisfaction and calls for reform in the ticketing process in the sector that has suffered decades of fraudulent practices.
THEWILL reports that Nigeria’s rail transport recorded improved revenue and higher passenger and cargo services in the second quarter of the year (Q2 2024) according to data by the National Bureau of Statistics (NBS).
According to NBS, in Q2 2024, a total of 689,263 passengers travelled via rail system relative to 474,117 reported in the corresponding quarter of 2023, indicating a growth rate of 45.38%.
The volume of goods/cargo transported via rail in Q2 2024 stood at 143,759 tons compared to 56,936 tons recorded in Q2 2023.
In the quarter under review, the Nigerian Railway Corporation (NRC) reported an additional volume of goods/cargo transported via pipeline which stood at 5,940 tons, higher than 2,856 tons in Q2 2023.
In terms of revenue generation, N1.69 billion was received from passengers during the reference period, showing an increase of 53.14% from the N1.10 billion recorded in the same quarter of the previous year.
Similarly, N537.36 million was collected from goods/cargo conveyed via rail in Q2 2024, up by 206.68% from N175.22 million received in Q2 2023.
In addition, revenue generated from the movement of goods/cargo via pipeline stood at N42.08 million in Q2 2024, higher than the N12.81 million reported in the corresponding period of last year.
Other receipts amounted to N994.68 million, indicating an increase of 5,206.68% during the period.
Other receipts amounted to N994.68 million, indicating an increase of 5,206.68% in Q2 2024 from the N18.74 million received in Q2 2023.
However, concerns have been raised over the high debt servicing and running costs associated with the sector since it was revamped about 10 years ago.
During this period, the government engaged in massive borrowing to rehabilitate the rail sector, involving construction of many kilometres of rail lines including the extension to Maradi, in Niger Republic.
According to NBS, in the first quarter, of 2024, Nigeria spent more on servicing the debt incurred for building its railways than the revenue generated by its railway system.
The country spent 2,470% per cent more on railway debt servicing than it made 2024from revenue from rail services in the first quarter of.
Total revenue from rail services amounted to N2bn in the first quarter of 2024, according to data from the nation’s statistical bureau.
Passenger revenue totalled N1,420,923,315 billion, and N607,315,323 million was made from goods/cargo. Total revenue for Q1 2024 was N2bn while in 2023, it stood at N6.07bn.
Total revenue for 2023 was 67 per cent higher than the N2bn made in 2024.
The report stated that 675,293 passengers utilized the rail system during this period, up from 441,725 in the same quarter of 2023, representing a growth rate of 52.88 per cent.
“The volume of goods/cargo transported via rail in Q1 2024 stood at 160,650 tons compared to 59,966 tons recorded in Q1 2023. In the quarter under review, the Nigerian Railway Corporation reported an additional volume of goods/cargo transported via pipeline which stood at 8,000 tons,” the report said.
In the first half of 2024, the government spent a total of N51.4bn on debt service payments for loans obtained for the Nigeria Railway Modernization Project (Idu Kaduna Section) and, Nigeria Railway Modernization Project (Lagos- Ibadan Section).
However, when compared with the time frame, in 2023, the total railway revenue was N999.71 million according to NBS in the first quarter of 2023, a total of 441,725 passengers travelled via the rail system.
THEWILL reports that the Federal Government aims to achieve N7.01 bn in revenue from train passengers by 2025, as outlined in the Nigeria Agenda 2050 document launched by former President Muhammadu Buhari.
It also aimed to elevate Nigeria to a top middle-income economy with a per capita GDP of $33,328 annually by 2050.
A transport expert, Henry Udoh, said the revenue hemorrhage in the NRC will lead to a prolonged debt servicing as Nigeria battles to meet her obligations in the rail sector.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
