Railway Debt Servicing Outpaces Revenue By A Staggering 1,200%, According To Report

Railway Debt Servicing Outpaces Revenue By A Staggering 1,200%, According To Report

In the initial six months of 2023, the cost of servicing railway debt surpassed revenue by an alarming 1,208.5%, as disclosed by an analysis of debt service documents. During this period, the government allocated $38.59 million (equivalent to N29.98 billion at N777/$) for repaying loans acquired for the Nigeria Railway Modernisation Project (Idu Kaduna Section) and Nigeria Railway Modernisation Project (Lagos – Ibadan Section)….CONTINUE READING

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Amidst these financial figures, the National Bureau of Statistics reported a total railway revenue of N2.29 billion. Passenger numbers in the first quarter of 2023 surged to 441,725, marking a substantial 53.65% increase from the corresponding quarter in 2022, when 953,099 passengers were recorded.

The revenue breakdown reveals a decline in passenger and cargo income. Passenger revenue stood at N768.44 million, a 63.02% drop compared to the same quarter the previous year. On the other hand, revenue from goods/cargos increased by 99.28% to N181.27 million. Other receipts declined by 41.02%, totaling N34.17 million in Q1 2023.

Moving into the second quarter, passenger numbers climbed to 474,117, and cargo volume surged to 56,029 tons. Despite the increase in passenger revenue to N1.10 billion (an 83.88% rise from the previous year), overall revenue from goods/cargos, and other receipts experienced mixed fortunes, with a 105.04% increase and a 62.31% decline, respectively.

The persistently low revenue from railway services has been linked to security concerns and ticketing challenges, especially with paper tickets still in use. The House of Representatives recently expressed dismay over the meager revenue generation from the Nigerian Railway Corporation, attributing the issue to ticket racketeering.

During a session on the 2024–2026 Medium-Term Expenditure Framework and Fiscal Strategy Paper, the Managing Director of the NRC, Fidet Okhiria, acknowledged the problem. Minister of Transportation, Saidu Alkali, offered a potential solution, stating that the implementation of e-ticketing would enhance railway revenue by simplifying ticket purchases, improving security, and eliminating racketeering.

In line with future revenue projections, the Federal Government aims to generate N7.01 billion from train passengers by 2025, according to a recent report by The BUSHRADIOGIST.

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