Nigeria’s Railway Revenue Leakages Worsen Amid Rising Debt Servicing Costs
As Nigeria faces the challenge of servicing substantial loans taken to expand its railway infrastructure, reports reveal that corrupt practices within the Nigerian Railway Corporation (NRC) continue to result in significant revenue leakages. Long-standing issues like ticket racketeering, diesel procurement fraud, and other malpractices have plagued the railway sector.
Recent developments include an investigation by the Federal Government into allegations of ticket racketeering on the Abuja-Kaduna rail line, following passenger complaints. The Minister of Transportation, Saidu Alkali, announced via his social media account that he had directed NRC Managing Director Fidet Okhiria to form a committee to investigate and address the alleged malpractices.
Alkali acknowledged the public’s concerns about difficulties in purchasing tickets, particularly for the Abuja-Kaduna route, and emphasized that the committee’s role is to review the ticketing process, identify any lapses, and hold those responsible accountable. This move aims to rebuild public trust and enhance transparency within the system.
Despite the introduction of an e-ticketing system intended to curb fraud, passengers continue to report difficulties in booking tickets online, with allegations of ticket hoarding and inflated prices at stations. This has led to frustration and calls for reforms within the sector, which has struggled with fraud for decades.
The railway system, however, recorded improved revenue and passenger services in Q2 2024, according to the National Bureau of Statistics (NBS). The number of passengers rose by 45.38%, and cargo transportation grew significantly. However, despite these improvements, concerns remain over the high costs of servicing railway-related debts. In Q1 2024, the government spent 2,470% more on debt servicing than the revenue generated by the railway sector.
As the Nigerian government continues to borrow heavily to modernize its railways, experts warn that the persistent revenue leakages could prolong the debt servicing period, threatening the sustainability of the sector. The government aims to boost railway revenue to N7.01 billion by 2025, as part of the Nigeria Agenda 2050. However, without addressing the ongoing financial mismanagement, the country’s rail sector faces an uphill battle in achieving this target.
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