Alligning rail transport service in ports operation to facilitate Nigeria’s international trade

By Ayaruja Matthew

Railway transport plays a significant role in the global economy, with a market value of $589.9 billion in 2024, projected to reach $781.2 billion by 2030, growing at a Compound Annual Growth Rate (CAGR) of 4.8%.
Global Railway Transport Statistics:

Passenger Rail: Expected to reach $431.8 billion by 2030, with a CAGR of 5%;

Rail Freight: Projected to grow at 4.5% CAGR over the analysis period;

Energy Efficiency: Rail transport accounts for only 2% of total transport energy demand, despite carrying 8% of global passengers and 7% of freight.

In juxtaposing the regional railway transport, it connotes that:
Asia: India and China are leading in railway transport, with significant investments in high-speed rail and electrification;
Europe: Well-established railway network, with a focus on sustainability and efficiency;
Africa: Growing demand for railway transport, with opportunities for investment and development.

These statistics demonstrate the importance of railway transport in the global economy, highlighting its potential for growth, energy efficiency, and environmental benefits.

It is pertinent to state that rail transport plays a vital role in Nigeria’s Marine Blue Economy, offering a cost-effective and efficient way to move goods and people. Effective rail transport can significantly enhance port productivity, reduce congestion, and increase trade efficiency. Some of the key benefits of rail transport for marine blue economy include:
Rail transport can lower transportation costs, making Nigerian ports more competitive and attractive to international traders.
Rail transport can provide seamless connections between ports, inland waterways, and landlocked regions, enhancing logistics and supply chain efficiency.
Rail transport is a more environmentally friendly mode of transportation, producing lower greenhouse gas emissions compared to road transport.
A well-developed rail network can create employment opportunities and stimulate economic growth.

Over the years, railway transportation has contributed to national economy in the following ways:
Economic Growth: Railways facilitate trade, commerce, and industry by providing efficient and cost-effective transportation of goods and people. This boosts economic growth, creates jobs, and increases GDP.

Global Connectivity: Railways connect countries and regions, promoting international trade and economic integration. They facilitate the movement of goods, services, and people, fostering global connectivity and cooperation.

Trade Facilitation: Railways play a crucial role in facilitating trade by providing a reliable and efficient mode of transportation for goods. This helps reduce trade costs, increase trade volumes, and promote economic development.

Environmental Benefits: Railways are a more environmentally friendly mode of transportation compared to road or air transport. They produce lower greenhouse gas emissions, reducing the carbon footprint of transportation.

Social Impact: Railways provide access to employment, education, and healthcare, promoting social mobility and reducing poverty. They also facilitate the movement of people, promoting cultural exchange and understanding.

Nigeria’s port operations, handling over 90% of the country’s international trade through key facilities like Apapa, Tin Can Island, Onne, and Port Harcourt, face chronic congestion and high logistics costs due to over-reliance on road transport. Aligning rail services managed primarily by the Nigerian Railway Corporation (NRC) with ports is a cornerstone of the Federal Government’s Renewed Hope Agenda, aiming to shift 20-30% of cargo to rail by 2030. This integration promises to cut evacuation costs by up to 40%, reduce highway wear, and position Nigeria as West Africa’s logistics hub.

Importantly, the alignment of rail transport services in ports operations is crucial for facilitating international trade between Nigeria and the rest of the world. Nigeria’s ports are critical gateways for the country’s international trade, with the majority of its imports and exports passing through these hubs. The efficiency of these ports is heavily dependent on the effectiveness of the rail transport system. Some key areas where rail transport services can enhance ports operations in Nigeria include:
Improved connectivity: Rail transport can provide seamless connections between ports and inland destinations, reducing transportation costs and increasing the speed of cargo movement.

Increased capacity: Rail transport can help alleviate congestion at ports by providing an alternative mode of transportation for cargo, thereby increasing the overall capacity of the ports.

Enhanced security: Rail transport can provide a more secure mode of transportation for cargo, reducing the risk of theft and damage.

However, it is worthy of note that there are challenges facing rail transport in Nigeria:
Inadequate Infrastructure: Nigeria’s rail network is still underdeveloped, with limited connectivity and outdated infrastructure.

Poor Security: Security concerns, such as theft and vandalism, can disrupt rail operations and impact port productivity.

Regulatory Frameworks: Outdated regulatory frameworks and bureaucratic processes can hinder the development of the rail sector.

Funding: Inadequate funding and investment can limit the expansion and modernization of the rail network.

To address these challenges and achieve these benefits, Nigeria’s rail transport system needs to be modernized and expanded to meet international standards and technology to improve efficiency, reliability, and safety.

Some potential areas for development include:
Investing in infrastructure and rolling stock to improve efficiency and capacity;
Enhancing connectivity to promote regional trade and integration;
Improving security and safety to increase confidence in the railway system; Promoting private sector participation to leverage investment and expertise.

In view of the foregoing, it is pertinent to state that by late 2025, rail-port alignment has gained momentum, with operational lines easing Lagos congestion and eastern corridors poised for revival.

Full integration could save $2-3billion annually in costs, but sustained funding and reforms are essential for 2026 targets.