Nigeria Fails To Service N110.31bn China Railway Debt, Sector Generates N12bn

The Federal Government In the last two years ending December 2022, has failed to service the railway debt owed China which has accumulated the sum of N110.31bn.

According to data from Nigeria’s external debt service payments report by the Debt Management Office (DMO) collated by THE WHISTLER, the accumulated debt represents the Principal fee and the interest fee.

DMO revealed that from January 2021 to December 2022, the principal fee stood at N69,009,417,500 ($153.85million) while the interest fee amounted to the sum of N41,311,455,000 ($92.1million).

The debts incurred are for the completion of the Nigeria Railway Modernisation Project (Idu-Kaduna Section), the Nigeria Railway Modernisation Project (Lagos-Ibadan Section), and the Nigeria Abuja Light Rail Project.

A breakdown of the data showed that in 2021, Idu-Kaduna Section’s principal fee was $ 38.46 million (N17.25bn) while interest earmarked is $ 9.5 million (N4.26bn).

However, the Lagos-Ibadan Section principal was not noted, but the interest stood at $ 24.07 million (N10.80bn).

During the period, the Abuja Light Rail Project had its principal fee at $ 38.46 million (N17.25bn) while the interest rate accumulated to $ 11.45 million (N5.14bn).

In 2022, the data revealed that the Idu-Kaduna Section principal was $ 38.46 million (N17.25bn) with an interest fee of $ 8.52 million (N3.82bn).

The Lagos-Ibadan Section interest fee stood the highest at $ 28.06 million (N12.59bn) with the principal amount not indicated.

Citing the DMO, the Abuja Light Rail Project principal fee raked $38.46 million (N17.25bn), generating an interest rate of $ 10.48 million (N4.70bn).

On Monday, the world bank in its Macro Poverty Outlook for Nigeria said that the country uses 96.3 per cent of its revenue to service debt

However, the debts seen by THE WHISTLER at the end of the two years period of the external debt service payments reports indicated that Railway debts do not represent 96.3 per cent spent on debt servicing.

Nigeria Railway Corporation (NRC) Rakes N12bn

The Nigeria Railway Corporation (NRC) has been able to generate the sum N11,606,737,070 in two years despite not being able to service its N41.31bn debt.

Citing the data from the National Bureau of Statistics (NBS), the sector realized the sum of N5,570,998,908 as revenue and fell by N464,739,254 compared to the N6,035,738,162 generated in 2021.

In 2021, railway services generated revenue of N5,697,512,095 from passengers, with goods realizing the sum of N299,805,884 and other income receipts earmarked N38,420,183.

However, 2022 revenue indicated that N4,546,342,056 came from passengers, N416,856,190 was realized from goods and N607,800,662 was generated from other income.

This indicated that while revenue generated from passengers fell in 2022, the goods and other income increased in productivity.

The NRC had earlier disclosed that Insecurity is impeding the growth of rail services in Nigeria.

Recall that THE WHISTLER had also reported that In March 2022, an Abuja-bound train was attacked in Kaduna by terrorists. Barely nine months after the attack, suspected kidnappers attacked another train in the Igueben Local Government Area of Edo State on January 7.

Also, recall that the former minister of transportation Rotimi Amaechi said that the estimated cost of the Abuja-Kaduna rail project was $874m. Noting that China‘s EXIM bank provided $500m as a concessionary loan for the project. The remainder was provided by Nigeria’s Federal Government.