Recession compels FG to ditch capital projects for $6,13bn railways modernization

Nigeria may be compelled by the prevailing economic recession to review some capital projects, as listed in the 2016 budget.

This is in preference to railways projects, estimated to cost $5.13 billion according to an investigation.

This position was indirectly stressed by government functionaries at a ceremony marking Nigeria’s signing up a Chinese firm, Civil Engineering Construction Corporation (CCECC) to modernise and build railways in the country.

The 2016 budget contains a total 4,599 items listed under the capital project window, out of which about 20 per cent have so far received some level of funding of about $1,5 billion (N350 billion).

Read Also : Dollar scarcity hits NNPC, threatens fuel scarcity in Nigeria

Many reasons were given on why government is focusing mainly on railways programme, among them is the need to sustain its new economic tides it entered into with China when President Muhammadu Buhari visited that country in May this year.

A Presidency source disclosed that, “part of the bilateral agreement centred on Nigeria buying in to China’s technology, of which railways is key.”

But Minister of State for Budget and National Planning, Hajia Zainab Ahmed, at a recent public function in Abuja, announced that the present financial situation would make it impossible for easy funding of some projects, and refused to name those to be affected.

However, Finance Minister, Kemi Adeosun, said Nigeria was looking towards external borrowing to allocate extra funds for capital projects, adding that part of this was the ongoing talks with General Electric and CCECC to develop and operate rail services to improve the transport for goods.

One agreement was for work on a railway segment between the northern states of Kano and Kaduna with a contract sum of $1.69 billion.

It will also cover extension of a railway line between the southern cities of Calabar and Port Harcourt to the Onne Deep Sea Port and from Abuja to other northern parts of Nigeria, to be completed in November 2018. China-Exim Bank, is to provide the counterpart funding, and is to cost about $4.4 billion.

 

RipplesNigeria …without borders, without fears

 

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now