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Economy | Transportation

Rail Transport: FEC Approves N453.90bn for the Kano-Maradi Standard Guage Rail Line

Mar 24, 2023   •   by CSL Research   •   Source: CSL   •   eye-icon 196 views

A Punch news report states that the Federal Executive Council, on Wednesday, approved the sum of N453.90bn for the procurement of rolling stock, operation and maintenance equipment for the Kano-Maradi standard gauge rail line. The c.284km line will run from Kano to Maradi in Niger Republic, passing through Jibia in Kastina and Dutse in Jigawa. Information gotten from public documents shows that the project will take a completion period of three to four years and be arranged under a 14-year buyer credit and long-term commercial loans. According to the report, the line has 15 stations along its path with a forecasted daily traffic of 9,364 passengers and approximately 3000 metric tons of cargo. 

 

Railways in the past played a critical role in economic development of Africa’s largest economy as it facilitated the transportation of passengers as well as goods and services efficiently. Unfortunately, years of neglect of both the rolling stock and right of way have seriously undermined the use of railway systems in the country. As a result, the stock of the country’s existing narrow-guage railway network have become obsolete and insufficient to handle the current freight and passenger volume. 

 

Recently, the government has embarked on a few rail projects supported such as the Abuja Light Rail, Abuja – Kaduna, Lagos – Ibadan, Ibadan – Kano. However, funding remains a major bottleneck. The Kano-Maradi standard gauge line according to the former Minister of Transport, Rotimi Amaechi is aimed at facilitating bilateral trade to position the country to become an economic hub for Niger. The rail line is also expected to help the country compete favourably with other coastal countries in West Africa in servicing the landlocked countries around Nigeria. 

 

Criticisms continue to mount the decision of the government to proceed with the Kano[1]Maradi railway project as many critics believe there are more economically viable projects that could be embarked on within the country especially amidst a paucity of funds. In our view, the Kano-Maradi railway project will provide support for the trade of goods and services especially with the recent operationalization of the African Continental Free Trade Area (AfCFTA) agreement as the provision of infrastructure is pivotal to the country’s ability to benefit from the biggest trade bloc since the establishment of World Trade Organization in 1994. 

 

However, considering the fiscal woes of the government, we are uncertain that the economic benefits of constructing a rail line to connect Niger and Nigeria will outweigh the cost of the project. We are also concerned about the downside risk of possible abandonment (given that the project will exceed the tenure of the current administration) considering Nigeria’s past history of incomplete infrastructure projects, project delays and cost overruns by the Federal Government.

 

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