GE leads Nigeria’s effort to diversify its economy with a $41b railway investment

In the bid to reduce dependency on its oil sector and diversify it’s economy, Nigeria has commenced a $41 billion railway expansion, connecting two commercial cities, Lagos and Kano, in the country.

In the same light, there is the construction of a coastal railway that connects the country’s centre of commerce, Lagos, to the eastern city of Calabar.

For the construction of the coastal railway project, a report said “the agreement reached between the federal government and the Chinese government which had agreed to finance the project, was that the federal government would provide a counterpart funding of N60 billion”.

The country had been seeking other means to diversify it’s economy  after undergoing it’s worst economic slide in over two decades, as a result of a drop in the price and output of oil which is a major source of the country’s revenue.

However, government have centered the economic recovery plan on diversification through boosting the agriculture sector and production.

In order to actualize this plan, the government has recognised the key importance of advancing the country’s transport system and power infrastructure.

To ensure the development of the country’s rail infrastructure the Nigerian government had selected the General Electric (GE) Consortum as the preferred bidder of the Concession of Lines, associated operational infrastructure, and spur lines of the Nigerian Railway Corporation.

As the world’s premier digital industrial company, GE Consortium is comprised of SinoHydro, a leading infrastructure construction services corporation, Transnet, a leader in transportation and logistics infrastructure management and APM Terminals, a global port, terminal and intermodal inland services provider.

“Revamping of the rail transportation system is crucial for successful diversification of the Nation’s economy” according to the country’s transport minister, Rotimi Chibuike Amaechi in a report.

He also added that: it will also increase earning’s from non oil investments.”

Rail system is  said to have supported Africa’s largest economy  in the mid 70’s to harness solid minerals  and agricultural produce, which were used to sustain the economy.

With the estimated cost of $20 billion for both railways, the 680 mile line is intended to cargo freight and passengers.

The Minister of Transportation in an interview in Abuja noted that “the railway plan is to go to every nook and corner”.

The Federal Government of the country had made a move to borrow $6.1 billion (N1.87 trillion) from the Chinese Exim Bank to complete ongoing rail projects in the country.

So far, $5.7 billion  had only been released by the bank for funding the construction of the two railways.

According to the Transport Ministry DI rector of P.R, “Rail projects will be completed on or before December 2019 as mandated by the Nigerian President, Muhammadu Buhari.

It is said that the country’s successive governments have left the transport sector comatose as a result of total neglect, leaving it in a characterized state of excessive government monopoly; grounded rail system whose services are more or less inefficient; obsolete and deficient transport policy; under-developed inland waterways transportation, ports and port services.

Transportation is one of the factors that affects production and industries, therefore making it one of the back bone of any meaning economic development in a Nation.

Nigeria’s rail system consists of 3,505 km of 3 ft 6 in(1,067 mm) gauge lines and 479 km of standard gauge lines.

It was in the military era that the railways lost its glorious past after been built during the colonial era, as Nigerians took to other means of transportation through road, sky and water in the riverine areas. The Nigerian rail system have been poorly maintained since then.

But with the recent help from the Chinese, the Nigerian government have begun working on building new railroads to facilitate trade and commercextend between Nigerian cities.

Worthy of note is the the 187 km standard gauge line between Kaduna and Abuja that was inaugurated by President Buhari. The Kaduna-Abuja railroad was built by China Civil Engineering Construction Corp under a US$876m contract signed by the federal government on October 26 2009. A Chinese loan covered US$500m of the cost, with the federal government funding the remainder.

Another event is the recent the ground breaking of the Lagos – Ibadan rail project that is to run from Apapa port in Lagos to Ibadan. This project is the second segment of the planned six segments Lagos to Kano standard gauge rail track.

In the effort to extend this development to other parts of the country, the Transport Minister confirmed that “other amount of money is being invested to ensure rail routes link all the country’s State capitals and extend across the Northern border into Niger’s Southern city of Maradi”.

With a good transport system in the country, one of Africa’s emerging economies is bound to experience economic prosperity as this will open door to mass employment opportunities, wealth creation and a massive economic boom.