In 2012, a $1.5 billion contract was awarded to China Civil Engineering Construction Company for the construction of Lagos-Ibadan standard railway.
The project was earlier earmarked for completion by 2016. However, it was not until June 10, 2021, that former President Muhammadu Buhari commissioned the project.
Olanrewaju Oyedeji visited different train stations, and details his findings.
“Cash only,” the cashier said, after I had asked if I could make a transfer or use the point-of-sale machine to buy a ticket from Agbado to Iddo in Lagos.
At the Agbado station, only cash was accepted – no digital or online payment was available.
I was neither asked to provide my name nor was I asked for any form of identification while buying the ticket.
The train was leaving Agbado for Iddo, and the ticket was sold for N700.
After buying the ticket, entry into the coach became a battle for the fittest. There was no check for tickets before entry, and some passengers hanged on the moving train to their destinations.
At the Yaba station, I was told that cash was the only accepted mode of payment.
The situation was similar at Agege, and everybody had no problem with it.
At Agege terminal station, cash was also king as there was no provision for any digital or online payment.
Babatunde Fashola Station, Agege
Tickets are booked one hour before train departures. Usually, trains depart by 8 a.m., meaning tickets will be on sale from 7 a.m.
At the booking counter, I was not asked for my details, nor was I asked for an identity card. I was just sold the ticket, after which I proceeded to a desk where I wrote my full name and ticket number, and then signed my name.
The train arrived just as scheduled. So by 8am, the trip to Ibadan had commenced.
Ineffective QR codes
Absence of digital payment platforms ridicules the Federal Government’s pledge to introduce e-payment and booking platforms at train stations.
The tickets from Agbado to Iddo as well as that of Lagos to Ibadan had QR codes on them. However, when I scanned the ticket from Agbado to Iddo, it only led me to the homepage of the Nigerian Railway Corporation (NRC)’s website built for booking train tickets from Kaduna to Abuja.
The ticket for Lagos to Ibadan trip did not show any QR code when scanned.
Abuja to Kaduna’s N900m e-ticketing platform fails to work
In 2021, the then Minister of Transportation, Mr Rotimi Amaechi, announced that the country had started a N900 million e-ticketing project for the NRC.
The project specifically targeted the Abuja-Kaduna railway line.
I tried to make an online booking using the ticketing platform for five different locations, yet I could not complete any successful online booking.
Although I was able to carry out a registration through the virtual NIN platform designed for the website, it was impossible to book a train.
I tried two different booking dates (the day I visited the website and also tried booking in advance for the next day) but did not succeed.
I also tried to call the phone number on the booking portal but it was switched off after several attempts.
In 2021, the House of Representatives investigated the inefficiency of the platform, noting that it had failed to curb the challenge of ticket racketeering.
Nigeria railways and poor accountability
My visit to different railway stations and a trip to Ibadan pointed to one issue: accountability problem.
At Agbado, except for the number of tickets sold, there was no exact record of who bought the tickets.
All the train stations also lacked online payment, leaving room for cash payments only.
The NRC had, at different times, promised to ensure the introduction of e-payment platforms for the Lagos-Ibadan train.
In 2021, the corporation noted that it would select operators for e-ticketing at the railway stations.
This development was reported after the Infrastructure Concession Regulatory Commission (ICRC) granted NRC licenses.
Two years after this reported commitment, the e-ticketing platforms are yet to be introduced.
On June 16, 2023, the NRC had acknowledged that its lack of a payment platform led to money losses.
The Managing Director of the NRC, Mr Fidet Okhiria, was quoted as saying that the corporation was losing revenue to a lack of payment platforms.
A Dataphyte report had also noted that although passengers increased by 18 percent, the revenue of the NRC dropped by N1.2 billion.
Loss of revenue distorts NRC’s loan repayment plan
The Lagos-Ibadan railway line was constructed with a loan of $1.267 billion from the China Eximbank with a maturity period of 20 years and a seven-year grace period. According to the loan documents, the loan is expected to have been entirely repaid by 2037.
Nigeria’s revenue loss from poor accountability and low revenue generally from railway may affect its ability to repay loans, say experts.
In 2020, former Minister of Transportation, Mr Rotimi Amaechi, had noted that profits made from railway services would be used to repay construction loans.
In 2021, the China Global South website also reported, using statements credited to Amaechi, that Nigeria was generating enough money to repay loans used to China.
However, in another development in 2021, Amaechi was quoted as saying that the country could not repay the loan from revenue made from railways due to their “low economic viability.”
Another Dataphyte report revealed that in 2021, the NRC revenue could not meet even its own personnel cost.
Nigeria, overburdened by its loan portfolio, must repay the Chinese loans, whether revenue is lost at railways or otherwise, putting more fiscal burden on the country.
Already, the country has repaid $1.87.1 billion (principal and interest) on different loans obtained from the Chinese Exim Bank for railways between 2022 and the first quarter of 2023, based on data published by the Debt Management Office.
Nigeria’s debt exposure (including ways and means) is over N70 trillion, according to the DMO.
Cash payments fuels corruption
Cash payments have proven very costly for Nigeria. More than N123 billion collected in Lagos transport taxes goes into private pockets due to absence of digitisation, according to an ICIR investigation. BusinessDay had earlier reported that Lagos revenue also goes into people’s personal bank accounts due to lack of digitisation. Billions of naira are stolen at various government levels due to absence of the digital process.
The country Director of the Accountability Lab, Mr Odeh Friday, told Dataphyte that lack of digital or online payment platforms often led to government revenue losses.
He noted that with the extent of investment made in the railway sector, it was only essential that the government create workable systems.
He recommended that the railways be handed over to the private sector to ensure efficient management.
Director at Lagos-based Investment firm, Chapel Hill Denham, Mr Tajudeen Ibrahim, noted that the railway corporation was living in the past.
He noted that with technological advancement and less available cash in the country, digital payment platforms would help the operations of railway companies.
He opined that inefficiencies and accountability issues were bound to happen at the railway stations if the situation persisted.
When contacted, the spokesperson of Nigeria Railway Corporation, Mr Mahmoud Yakubu, told Dataphyte that the corporation planned to transit to digital payment platforms soon.
“Cash is indeed the only form of payment now and we are working on transiting to digital payment platforms soon,” he noted.
He denied that financial foul plays were occurring at the train stations, refuting any of such occurrences.
When asked about the government’s loan repayment plan, he declined comments, noting that only the minister of transportation could comment on that.
This story was produced with support from the Centre for Journalism Innovation and Development (CJID) and funding from Centre for International Private Enterprise (CIPE)