Rail transport gaining some traction

Drawing on data provided by the Nigerian Railway Corporation, the National Bureau of Statistics (NBS) has released its recent report on railway passenger traffic. The report estimates total traffic in Q2 2018 at 730,289 passengers, representing a decrease of -2.4% q/q and an increase of 22% y/y.  Efforts by the FGN to improve rail connectivity are laudable. However, increased foreign and domestic private sector investments should accelerate the execution of rail projects within the country. The federal ministry of transportation projects a total of US$36bn to complete railway connectivity across the country.


  • Based on the data, revenue generated from passengers via rail amounted to N436m (US$1.4m) in Q2 compared with N413m (US$1.3m) generated in the previous quarter.

  • Product distribution across the country has been difficult due to logistics issues, especially within the agriculture value chain as a supply of farm products to end-users remains a challenge. We expect improved rail operations to assist with curbing this challenge. During the period under review, freight traffic via rail recorded a total of 85,816 tons, representing a q/q increase of 8%.

  • The federal ministry of transportation has revealed that the FGN is in negotiation with the China Export-Import Bank for a loan of US$6.7bn. This fund is expected to assist with developing the Ibadan-Kaduna route. This project should begin next year.

Sources: National Bureau of Statistics (NBS); FBNQuest Capital Research
  • Last year, the government had secured a loan of US$1.5bn from the China Exim Bank to complete the construction of the Lagos-Ibadan railway network route. Based on our channel checks, the project has already attained 90% completion and should be complete by end-December.


  • In Q2, rail transport accounted for less than 1% of transportation GDP. Rail is an unlikely option for most Nigerians when compared with other transportation options. However, it will reduce the burden on the road network, especially from heavy-duty goods.


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