This is the toughest mathematical equation the government of Nigeria has to solve, and it is coming from the Nigerian Railway Corporation (NRC). Let’s go:
NRC 2020 revenue was N1.13 billion.
NRC is asking the government for N61.5 billion for 2022 procurement activities (working capital, parts, insurance, locomotives, etc).
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NRC’s current personnel strength is 10,672; those workers will cost N9.14 billion for 2021. (Note the delta between revenue and personnel cost).
To run Lagos-Ibadan, NRC needs about 1,000 staff which will add additional N0.5 billion in the payroll.
Does this math balance for the NRC and for the nation? I support the investment in railway systems, but I still struggle how this will work, since the fees they are collecting are unbelievably low with most costs dollarized or yuan’d (as in China).
Sure, miracles do happen but I am deeply concerned that this railway playbook in the nation may have a broken railtrack already. If Nigeria hopes to have a working railway system, someone needs to look at these numbers and take action, immediately.
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The APC people shouting ‘infrastructure’, what is the business plan? If you are making little over N1 billion, what are you doing with over 10k personnel? If the argument is about old personnel from decades past, then it’s sensible to pay them off and disengage them, you cannot be spending multiples of your revenues as salaries.
Most of the railway services can be concessioned, just like in aviation, the government doesn’t need to carry excess baggage that can only drown it.
Maybe Nigeria is the only country in the world who borrows billions of dollars without a plan, building is different from running, we have never been great on the latter. Our pricing is always faulty, because it’s a product of politics rather than economics, so the railway is never revived to service itself and pay its debt, instead the government will be collecting money elsewhere to run it, yet we claim to have any sense in our heads.
Once the government completes laying of rail tracks, it has no credible business on what happens next, because it has no further talent to contribute; it’s now for businesspeople to step in and make business out of it.
The revenue will still appear disappointing as a monthly revenue, and we are here talking…