September 22, (THEWILL) – Nigeria’s rail transport sector 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 per cent.
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 period of reference, showing an increase of 53.14 per cent 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 per cent during the period.
Other receipts amounted to N994.68 million, indicating an increase of 5,206.68 per cent 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 from revenue from rail services in the first quarter of 2024.
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.
Recall 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.
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.
