Will Nigerians see the benefits of new railways?

Transport infrastructure wins are one of the most polarising achievements of President Buhari’s administration.

Despite boasting millions of dollars spent on several projects, from roads to bridges and rail lines, people can’t seem to make up their minds about this administration’s impact on transportation. On the one hand, some are elated with the pace of infrastructure, while others claim that the benefits of our transport investment are hard to see. 

​​​​​​

But let’s focus on rail transportation. President Buhari’s recently released achievement fact sheet states that rail infrastructure has grown by at least 677 kilometres between 2016 and 2021. We’ve all seen the completion of the Itakpe-Warri standard gauge rail line after almost 30 years of its commencement. We also witnessed the completion of a new standard gauge railway between Ibadan and Lagos, including its extension to the Apapa Port. There’s also the completion of the Abuja-Kaduna railway line and the many ongoing railway projects throughout the country.

In past articles, we've lauded these projects and acknowledged the benefits of trains, including expanding local industries from agriculture to manufacturing, reducing travel time and fares, and improving government revenue. However, quantifying the benefits of rail and other infrastructure investments is challenging.

For instance, we could say that one benefit of the railway extension to Apapa port is the reduction in traffic congestion in the area. However, reduced congestion in Apapa could also be attributed to anti-congestion policies at the port or better road infrastructure. There are also costs or adverse effects caused by new rail lines that are complex to analyse, such as the demolition of over 1,000 homes to construct the Lagos-Ibadan rail line. While these homeowners might be compensated financially for the cost of their homes, the inconvenience and psychological costs associated with being displaced will be challenging to quantify. These costs are important for unearthing the net benefit of rail investment.

Essentially, determining the benefits of rail infrastructure projects is a complex process that involves addressing exogenous economic and social factors that frequently change throughout the lifecycle of these projects. 

Another issue to consider is that the largest benefits and costs of rail (and other) transport investments are likely to be indirect and second-order effects (or even higher-order effects). For example, if the government builds a bridge between two rural towns separated by a lake, we could directly measure the impact by looking at traffic on the bridge, increased trade between the two towns, and so on. These are important metrics but fall short of capturing the full picture. Here are some other things that we care about that would be harder to capture:

• Increased sharing of economic and creative ideas across the two towns.

• Greater social variety for the residents of the two towns.

• The opportunity cost of building the bridge. 

• The social effect of the bridge: would it bring the two populations closer or cause more strife? Would it make each town safer or increase security risks? Etc. 

The final obstacle is data. To empirically assess the impact of rail investments, we need to collect and analyse the necessary data. Given what we have said about the myriad factors and issues involved, this is a challenge for even the most sophisticated economy. In Nigeria, a country with inadequate data infrastructure and institutions, this is nigh on impossible. 

Yet it is crucial to see if trains made life easier for Nigerians. On paper, you would expect rail transportation to improve the lives of travelling Nigerians across specific indicators such as travel time, costs, and safety compared to other transportation modes. However, reality might be a lot different from theory.

It’s better on paper 

First, is travelling by train cheaper?

This is an important question, especially if we are only looking at the financial aspect of commuting, which will consider the growth rate of prices, transport included.

On Monday, we heard the news of inflation reaching 19.6%, and transport prices were not left behind. Since 2011, transport prices have increased by an average of 11% yearly.
 

So if people can find alternative and cheaper modes of transport, that’s one win as their lives can become better. 

Still, the above question is better posed when asked in addition to “compared to what?”

The general expectation is that train rides are cheaper than other competing modes of transport, especially air travel. However, the reality for Nigerians is that there are no direct flights from Lagos to Ibadan, Warri to Itakpe, or Abuja to Kaduna—the three routes of Nigeria’s major rail lines. So a comparison to air travel is not plausible. However, considering these locations, road travel is a comparable or competing mode of transport.

A review of the direct cost of commuting these routes shows roads are still much cheaper. Last year, Fadekemi, our editor-in-chief, predicted this would most likely be the case, and so far, nothing has changed. The cost of a trip from Lagos-Ibadan ranges from ₦2,500-₦6,000, depending on the class of travel you opt for. A bus trip along the same route costs roughly ₦500-₦1,000 less.

Of course, we know not to simply directly compare the price of road and rail transport, even for the same route (e.g. Lagos-Ibadan). Many factors can explain why one mode remains more expensive than the other in the long term, e.g. security and duration of trip.

But besides looking at cost from a purely financial angle, unpredictable stops and cancelled train rides can also be costly and complicate the lives of train commuters. For instance, before the recently reduced daily schedule of the Lagos-Ibadan line from six return trips to two, there have been disappointing reports of avoidable delayed trips or unplanned stops. Such incidents can be costly in terms of time or safety for people embarking on a business or health trip. If people will pay more for train trips and would be uncertain of their arrival or take-off time, it is bound to create apathy.

Going by the data from the National Bureau of Statistics (NBS), this might already be happening as passengers commuting by train halved in 2020 and are yet to hit pre-covid levels, despite the addition of two new rail lines. Last year, the number of passengers was 2.7 million, nearly 180,000 less than 2019’s 2.9 million passengers. The decline was even steeper compared to 2018 when the Nigeria Railway Corporation (NRC) recorded 3 million passengers for the year.

As we hinted earlier, we should interpret these numbers cautiously without comprehensive data. They show us the changes in aggregate passenger numbers but without additional data. Once again, we can only draw limited inferences about the reasons for these changes. For example, reduced passenger numbers could be a function of supply rather than demand. Passenger numbers will drop involuntarily if fewer trains operate (or fewer cabins/seats are available). Ultimately, this data is indicative rather than conclusive.

Furthermore, even if we conclude that train rides have not saved you extra cash or time compared to travelling by road, it doesn’t automatically mean that rail investment has not yielded the benefit of cheaper commuting options for Nigerians. For many, train rides provide a smoother journey where productive activities can help a commuter save or earn money. 

In a conversation with Stears, Jide Ehizele with the UK-based Railway Consultancy explained how potential productivity benefits can mitigate the high costs of travelling by train. “For instance, one can work or read on a train. In a 2.5-hour journey between Lagos to Ibadan, I could write an article or read a journal. I wouldn’t have been able to do this if I travelled via road.”

But as I explained earlier, the problem is that these benefits Ehizele mentioned are difficult to quantify. Some reasons for this difficulty include other challenges such as insecurity that has heightened the lack of safety for train travel. 

It’s not safer on the tracks

After the March 28, 2022 abduction of over 90 commuters on the Abuja-Kaduna route, being safe might be the last reason Nigerians will choose to take train rides. But believe me, it was once a viable reason. Road transport was and is still not a necessarily safer option for commuting. 

For instance, in the first quarter of this year, traffic crashes claimed nearly 1,900 lives, according to NBS data. These lives were lost as a result of over 871 fatal crash cases. Serious and minor road crashes were 2,100 and 374, respectively, accounting for the over 22,000 people who were injured or suffered a form of casualty.

Incidentally, Kaduna, the state with the highest (over 10% or 179 of the total) road fatality levels in Q1 2022, is also home to one of the major rail routes. But this does not tell us if trains are safer, especially for Kaduna residents who might be experiencing fatal road accidents within the city, as opposed to commuting across major towns such as between Kaduna and Abuja. Moreover, we need to account for population and economic activity—it is reasonable to assume that the number of people commuting (by road or otherwise), the type of commuters (e.g. commercial vehicles, students on their way to school, or trucks ferrying goods around) would influence the number of road accidents. Without analysing this data (which is not readily available), we cannot say much about road accidents or fatality trends in any specific location. Ultimately, the data can tell us what is happening, but we can only draw limited inferences about the comparative safety of road transport in areas with rail alternatives. 

Nevertheless, we can at least make soft comparisons. In this case, train crashes or collisions should be the comparable metric for assessing train ride safety. However, while train fatalities are common (due to other factors beyond crashes), anecdotal cases of trains derailing or colliding with vehicles on the rail tracks have shown that the incidents often result in fewer fatalities.

But even if commuters worry about insecurity and safety in one location, how about the other areas where train services are still operating? Other rail lines have been relatively safe. However, the capacity for these trains is essential in understanding why the benefit of rail infrastructure is moot and appears less appealing to Nigerians.
 

It was rigged from the start

Earlier, I explained that the government launched the Warri-Itakpe line in 2020 and the Lagos-Ibadan line in 2021, which should have boosted rail passenger numbers. The reported yearly capacity for both lines is roughly 1.5 million passengers, with a projection of 1 million and 500,000 yearly passengers on the respective routes.

If these trains function fully, 1.5 million passengers are expected to get aboard yearly. But that’s a big ‘if’, and considering the metrics we’ve assessed earlier, achieving such a feat is unlikely.

Beyond costs, additional capacity will only make a difference if people are willing to take the train. And this willingness is often driven by little things such as viable routes and better travel time. These are things within the control of the government that can sway people’s behaviour, especially in locations that are not as prone to insecurity. For instance, the first train on the Lagos-Ibadan route, which travels from Lagos, arrives in Ibadan at 10:50 am on a weekday and leaves at 4 pm.

But there are fewer weekday schedules for commuters coming from Ibadan to Lagos, suggesting that the rail line prioritises commuters travelling to Ibadan from Lagos on weekdays. Considering Lagos is the country’s economic capital, something as little as reversing or adding a schedule to serve commuters who need to get to Lagos from Ibadan on weekdays could yield higher passenger volumes.

Other transformational benefits tailored to the class of commuters for each rail line are also worth exploring. According to Ehizele, a standardised approach to all passenger services will not maximise the benefits of these investments because trains have different customer segments with unique pain points.

For instance, the Abuja-Kaduna corridor serves large volumes of business travel, suburban commuting to Abuja and Education trips, e.g. lecturers and students of Kaduna State University.  The Lagos-Ibadan route is also primarily for business travel and leisure—Olumo Rock in Abeokuta, while the Warri-Itakpe line mostly serves the rural customer segments. This means that offering a 70-minute non-stopping intercity fast train for passengers who highly value time, e.g. business travellers, would allow trains to compete with private cars or buses that will take roughly 100 to 120 minutes. Meanwhile, leisure and commuter customers can benefit from off-peak and peak ticket pricing, respectively, with car train services tailored to town market days.

Ultimately, offering services tailored to different market segments will maximise customer satisfaction, Ehizele suggested.

That said, having rail lines to assess in the first place is a big win. It would be remiss not to recognise this administration's work in finishing and launching new rail lines, cabins and routes. And while energy prices and heightened insecurity are viable threats to the sector, such feats are worth applauding. But there is more work to be done. By creating incentives for higher train commute and providing realistic performance measures, the gains of rail investment for the ordinary Nigerian will be much clearer and the applause much louder.