In a shocking turn of events the Nigerian Railway Corporation(NRC) debt servicing costs is reported to have exceeded revenue by 1,208.5 percent in the first half of 2023, an analysis of debt service documents has shown.
The report according to The Punch said that in the first half of 2023, the government spent $38.59m (N29.98bn at N777/$) on servicing debt for loans obtained to build the Nigeria Railway Modernisation Project (Idu Kaduna Section) and Nigeria Railway Modernisation Project( Lagos – Ibadan Section).
At that time frame, the total railway revenue was N2.29bn according to data from the National Bureau of Statistics. In the first quarter of 2023, a total of 441,725 passengers travelled via the rail system, a 53.65 per cent increase from the 953,099 reported in the corresponding quarter of 2022.
In terms of revenues, the NBS said, “In terms of revenue generation, N768.44m was received from passengers over the period, lower by 63.02 per cent relative to N2.08bn in the same quarter of the previous year. Similarly, N181.27m was collected in Q1 2023 as revenue from goods/cargos, up by 99.28 per cent from N90.96m received in Q1 2022
“In addition, other receipts amounted to N34.17m, indicating a decline of 41.02 per cent in Q1 2023, from the N57.92m collected in Q1 2022.”
By Q2, the number of passengers travelling by rail increased to 474,117 passengers and the volume of goods/cargo transported rose to 56,029 tons.
Commenting on revenues, the statistics body stated, “In terms of revenue generation, N1.10bn was received from passengers during the reference period, showing an increase of 83.88 per cent from the N598.74m recorded in the same quarter of the previous year
“Similarly, N188.03m was collected from goods/cargos conveyed in Q2 2023, up by 105.04 per cent from N91.70m received in Q2 2022. In addition, other receipts amounted to N18.74m, indicating a decline of 62.31 per cent in Q2 2023 from the N49.73m collected in Q2 2022.”
Low revenue from railway services has been attributed to insecurity and ticketing issues (with the paper tickets still a thing in the country). Recently, the House of Representatives decried low revenue generation from the Nigerian Railway Corporation.
This observation, which was blamed on ticket racketeering, was shared when the Managing Director of the NRC, Fidet Okhiria, appeared before the House of Representatives Committee on Finance recently during the 2024–2026 Medium-Term Expenditure Framework and Fiscal Strategy Paper interactive session.
The Minister of Transportation, Saidu Alkali, recently disclosed 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.”
A recent The PUNCH report stated that the Federal Government intends to make N7.01bn from train passengers by 2025.