Railway debt servicing gulps N246bn

The Federal Government spent $548.67million (N246.11billion using the official exchange rate of N448.55 to a dollar by the Central Bank of Nigeria) to service railway-related debts between 2016 and 2022, according to Nigeria’s external debt service payments reports by the Debt Management Office (DMO).

Between January and December 2016, railway debt servicing gulped $19.99 million, with the Nigeria Railway Modernisation Project taking $11.37million and the Nigeria Abuja Light Rail Project gulping $8.26million.

By 2017, railway debt servicing gulped $21.53 million, with the Nigeria Railway Modernisation Project taking $12.14million and the Nigeria Abuja Light Rail Project incurring $9.39 million.

The total spent on servicing railway debt kept rising in 2018, taking a total of $63.92 million between January and December that year.

The Nigeria Railway Modernisation Project (Idu-Kaduna Section) took $50.81 million, the Nigeria Railway Modernisation Project (Lagos-Ibadan Section) gulped $2.82 million and the Nigeria Abuja Light Rail Project gulped $10.92 million.

The Federal Government spent $74.25 million to service railway-related debts in 2019.

The Nigeria Railway Modernisation Project (Idu-Kaduna Section) gulped $49.91million, the Nigeria Railway Modernisation Project (Lagos-Ibadan Section) gulped $12.68million and the Nigeria Abuja Light Rail Project gulped $11.66million.

The amount spent on serving railway debts kept rising the following year, as the debts cost Nigeria $121million in 2020.

The Nigeria Railway Modernisation Project (Idu-Kaduna Section) gulped $48.97million, the Nigeria Railway Modernisation Project (Lagos-Ibadan Section) gulped $21.28 million and the Nigeria Abuja Light Rail Project gulped $50.75million.

By 2021, the total amount spent on servicing railway debts had risen to $122.92 million.

The Nigeria Railway Modernisation Project (Idu-Kaduna Section) gulped $47.96million, the Nigeria Railway Modernisation Project (Lagos-Ibadan Section) took $24.08million and the Nigeria Abuja Light Rail Project gulped $50.88million.

For 2022, the only debt data accessible was for January to September as only three-quarters debt reports have been released by the DMO as of the time of filing this report.

In the first quarter of 2022, a total of $61.73 million was spent on servicing railway debts, which included $23.58 million on the Nigeria Railway Modernisation Project (Idu-Kaduna Section), $13.60m on the Nigeria Railway Modernisation Project (Lagos-Ibadan Section), and $24.55million on the Nigeria Abuja Light Rail Project.

However, by the second quarter of 2022, it was observed that no Chinese debt was serviced.

By the third quarter of 2022, a total of $63.33 million was spent on servicing railway debts, which included $23.41million on the Nigeria Railway Modernisation Project (Idu-Kaduna Section), $14.95 million on the Nigeria Railway Modernisation Project (Lagos-Ibadan Section), and $24.39m on the Nigeria Abuja Light Rail Project.

It was also noted that $580,889 was spent on the Nigerian supply of rolling stocks and depot equipment for the Abuja light rail project.

In total, the Federal Government spent $125.06 million on servicing railway debts in 2022.

The rising railway debt servicing costs occurred as the government struggled to generate revenue from the railway sector.

While the Nigerian Bureau of Statistics (NBS) has no figure on how much was earned from train services in 2016, data from the Rail Transportation reports showed that N18.09 billion was earned between 2017 and 2022.

In 2022, the revenue data was available for only two quarters – the first and second quarters.

In 2017, the Federal Government earned N1.71 billion, which included both passenger and cargo train services.

The Federal Government earned N2.52 billion in 2018, N2.84 billion in 2019, N2.03 billion in 2020, and N6.05 billion in 2021 from train services.

In the first quarter of 2022, the Federal Government earned N2.21billion but this revenue crashed massively by 66.73 per cent to N734.47million in the second quarter of this year.

In 2022, security challenges threatened revenue from train services, especially the Abuja-Kaduna train services.

Last August, it was reported that the Nigeria Railway Corporation suspended the Lagos-Kano and Ajaokuta train services due to the fear of terrorist attacks.

This was after terrorists attacked the Abuja-Kaduna train on March 28, 2022, kidnapping 168 passengers and killing eight others.

The release of the victims had been in batches since then, with the last 23 released in October, 2022.

The Managing Director of the NRC, Fidet Okhiria, recently disclosed that the Federal Government lost about N113 million due to the non-operation of trains at the Abuja-Kaduna railway for over eight months.

Economic and financial experts have warned the Federal Government that Nigeria risks losing key national assets to China in the event that it defaults in paying back loans obtained from China.