FG rakes in N1.1bn through rail transport as number of passengers hit 474,117 in Q2 2023

Nigeria generated a whooping N1.1 billion from passengers through rail transport in Q2 of 2023. This is according to a report from the National Bureau of Statistics (NBS). Additionally, the volume of passengers grew from 441,725 in Q1 of 2023 to 474,117 in Q2 of 2023. This represents a growth rate of 12.2% when compared to the number of passengers recorded in Q2 of 2022 (422,393).

Despite not being the first choice for most citizens today, rail is arguably the oldest modern means of transport. Until recently, the government exclusively owned and managed the sector. 

Aside from insights into passenger and revenue data, the NBS report also shed light on some other important aspects. Unlike with the volume of passengers and revenue where significant growth was recorded, the NBS study observed a slight decrease in the size of cargo conveyed by rail in Q2 of 2023. 

In Q1 of 2023, the volume of cargo was 59,966 tons. That number declined to 56,029 tons in Q2. Meanwhile, the volume of freight transported by rail in 2022 steadily grew between Q2 and Q4 of 2022. (31,197 tons in Q2, 33,312 tons in Q3, and 53,136 in Q4). This might indicate that people find it more useful in transporting themselves than their cargo.

Regarding revenue gained from passengers, the NBS found that the profit rose from N768 million in Q1 of 2023 to N1.1 billion in Q2. Compared to the N598 million received from passengers in Q2 of 2023, there has been an 83.88% increase. As the NBS awaits the year’s end to compute the total revenue acquired across the four quarters, it is worth noting that the National Railway Council (NRC) raked in N4.5 billion in 2022. 

Still on the profit topic, the revenue from transporting goods/cargo surged from N181 million in Q1 of 2023 to N188 million in Q2. These numbers far outweigh the figures obtained in the previous year (N90 million in Q1 of 2022 and N91 million in Q2 of 2022). The NBS study also documented the income obtained through additional income receipts. The revenue from this segment for Q2 dropped to N18 million from N34 million in Q1. 

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Outlook on Nigeria’s rail sector 

Rail transport has existed in Nigeria for decades. Successive governments have endeavoured to upgrade the sector to meet modern standards. This has not been without hitches. Last year, bandits targeted a train travelling from Abuja to Kaduna. Aside from casualties on the train, the criminals kidnapped hundreds of passengers. Although the passengers have long been released and the route operational again, the stigma remains. 

However, the government has remained optimistic about the sector. Early this year, former President, Muhammadu Buhari assented to a game-changing amendment that would allow states to build and manage indigenous rail networks. 

This was intended to democratize investment in rail transport and accelerate its growth. Lagos took the lead with the completion and launch of the Blue Rail line. Operational as of this week, the rail line is expected to convey at least 175,000 passengers daily.