Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 45)

Total revenue and income generation by the rail sector dipped significantly in Q2 2022, according to the latest rail transport statistics published by the National Bureau of Statistics (NBS). The report shows that aggregate revenue generated by the sector dropped by over 200 percent. It decreased from about N2.2 billion in Q1 2022 to about N734.5 million in Q2 2022. The decline in revenue was primarily due to the sharp fall in the total revenues generated from passengers, which fell from N2.2 billion to N598.7 million. Also, the total number of passengers over the same period reduced to 422,393 from 953,099. The decline in the number of passengers is due to the shutdown of the Abuja-Kaduna railway line in March 2022. The shutdown was due to the kidnapping of over 50 passengers. To revert low patronage and income generated, the security of the railway is essential. Hence, the government must resolve the ongoing insecurity issues that have reduced patronage, negatively impacting the sector’s income and capacity to repay the credit facility provided to revive the train stations. While the government is preparing to reopen the Abuja-Kaduna railway, there is a need for concerted efforts targeted at strengthening the security architecture. Otherwise, passenger patronage will remain low after reopening the rail line.

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