Construction Of $1.95bn Railway To Niger Republic Political-Renaissance Capital Boss

The Global Chief Economist, Renaissance Capital, Charles Robertson has said that the construction of the $1.95bn railway project from Nigeria to Niger Republic has political consideration.

The Federal Government had on Monday awarded the controversial rail project linking Nigeria to Niger Republic to a Portuguese construction firm, Mota-Engil Group.

The Federal Executive Council had in September 2020, approved $1.95bn for the construction of Kano-Dutse (Jigawa)- Katsina- Jibia – Maradi (Niger Republic) rail line project.

The rail project has drawn several criticisms from Nigerians, with the opposition Peoples Democratic Party and some civil rights groups, saying the project was a misplacement of priority in a country facing intractable problems of insecurity and harsh economic conditions arising from hikes in fuel price and electricity tariff.

“I think infrastructure spending is essential for Nigeria. The country needs investment. But it is vital that it spend on the projects most likely to produce a big return- eg electricity and transport near the big economic centres,” Robertson, told THE WHISTLER in a chat.

Nigeria needs an estimated N37.9trn ($100bn) yearly for the next 30 years to solve it’s infrastructure problem, according to the Minister of Finance, Budget and National Planning, Zainab Ahmed.

The Federal Government in the 2020 budget allocated N2.49trn for capital expenditure, representing only 6.6 per cent of the N37.9trn, while in the 2021 budget, N4.37tn was approved for capital expenditure.

Robertson said, “I’ve been struggling to understand why Nigeria would spend $2bn getting a Portuguese firm to build a railway line (Kano to Maradi in Niger) to one of the poorest nations on earth. This story suggests politics and oil from Niger to Katsina is part of it.”

Meanwhile Lagos based CSL Stock Broker Ltd on Tuesday criticised the newly awarded project over its economic benefit to the country.

The firm said, “Given the weak purse of the government, we are uncertain if 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.”