The grand plans devised for the regeneration of the Nigerian rail sector could have a massive impact on trade both within the nation and between the West African giant and the rest of the world.
Yet the country's railways are only one part of a much wider transport network. Goods are carried to and from West Africa by international shipping lines, so the ports that act as an interface between Nigeria and the wider world have a vital role to play. Substantial progress has been made on implementing the port reform process but much more needs to be done before the port and rail network can act as a boon rather than a hindrance to investors.
Nigeria's poor transport infrastructure has long deterred investment, particularly from local companies. Trade between different parts of the country is limited by the cost in time and money of moving goods and people from one region to the next. This not only has economic ramifications but also a social and political impact, in that it pulls at the fabric of national cohesion. Trade between regions and between nations is the best antidote to conflict yet devised and the north and south of Nigeria do not trade nearly enough with each other.
In October, months of promises of Chinese investment in the Nigerian rail sector finally seemed to come to fruition. China Civil Engineering Construction Corporation (CCECC) signed an $8.3bn contract to develop a rail line between Lagos and Kano. The 1,315km railway will form the centrepiece of the new rail network and will enable freight to be moved far more easily between north and south than on the country's overused and under-maintained road system.
Whether from private or public sources, new investment is expected to be made in many of the nation's ports over the next five years, partly to enable them to make the most of the new rail links.
Vastly improved rail freight services will have any number of benefits for Nigerian ports. They will encourage and enable trade, and so are expected to promote the use of any ports served by a modern rail station. Improved rail links will also enable goods to be moved in and out of each port, preventing overcrowding and minimising the amount of new storage capacity required, whether for dry bulk, container or any other form of freight.
The Nigerian port sector has long been controlled by the state-owned Nigerian Ports Authority (NPA). Despite the need for efficient ports to promote trade...