Despite the multi-billion naira assets currently in the possession of the Nigerian Railway Corporation, the company is still valued at just N20m in the asset register of the Ministry of Finance Incorporated.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed gave the figure on Wednesday in Abuja during the public presentation of the 2022 budget proposal.
The Nigerian Railway Corporation is 112 years old and it runs a unilaterally designed track system of 1067mm cape gauge.
Nigerian Railway System actually commenced rail business activities with the construction of the first rail line from Lagos to Ibadan (193km) between 1898 and 1901. By 1964 when the construction of 640km kano – Maiduguri rail line, then known as Bornu extension, was completed, the present core of the railway network had been put in place.
The Federal Government is rehabilitating the railways with the 156-kilometer Lagos-Ibadan railway costing $1.5bn and it is funded by a $1.3bn loan from the Export-Import Bank of China and about $182m from the Nigerian government.
The Abuja- Kano railway was valued $1.5bn with $500m borrowed from China under Goodluck Jonathan. This sums to over $7.1bn for the three lines alone.
But Ahmed said for several years, the Federal Government had yet to revalue some of its assets as they were still being carried at their historical cost.
She gave some of the assets that needed to be revalued to include the Nigerian Airport, and the Nigerian Railways among others.
She added that steps are being taken to revalue these assets to reflect their net realizable value, adding that when this process is over, the government can use some of these assets to raise equity needed in financing capital projects.
She said, “Currently in the book of MOFI, we already have the sum of N33trn in terms of assets size. Government does not have the capacity to capitalize on this asset enough.
“When I talk about assets, I talk about investment in the Bank of Industry, Development Bank of Nigeria, Galaxy Backbone, several agencies and the government.
“These are companies that the government has set up, that government owns. A few of them are doing well and delivering well. Our assessment is on what they are doing, and they can still do better by incremental adjustment.
“For example, we have the railways in the books of MOFI, which is N20m as the assets size, and we are conducting revaluation.
“By the time we finish the revaluation, the value of the Nigerian Railway will be running into trillions. By the time we finish the revaluation, the value of the airports that we own will also run into trillions.”