According to the National Bureau of Statistics’ most recent data on rail transportation, the total revenue generated through the mode of transportation grew by +81% q/q to c.NGN1.7trn in Q4 ’22. This compares favourably with an increase of +27% q/q in the previous quarter. On a y/y basis, the total revenue declined by -16% y/y. Specifically, the total sector’s revenue is made up of income from passenger fees, freight, and other sources.
The robust q/q growth in total revenue can be attributed to a rise in passenger traffic, which more than doubled to 1.4 million in Q4 ’22.
According to local newswires, the resumption of operations on the Abuja-Kaduna railway line in December 2022 was another factor which partly contributed to the q/q rise in total revenue.
Conversely, the y/y decrease in revenue can be attributed to the suspension of rail operations along the Abuja-Kaduna route. We recall that the federal government suspended the Abuja-Kaduna line’s operations in March ’22 because of security concerns.
According to the data, passenger revenue increased +61% q/q to NGN1.2bn in Q4 ’22, but declined -40% y/y to NGN1.2bn.. It also accounted for 68% of gross revenues during the quarter.
Revenue receipts from other income increased significantly by 224% q/q to c.NGN382m, while revenue from cargo transportation amounted to over NGN157m, representing an increase of 64% y/y.
The revenue generated by this mode of transportation in FY ’22 was NGN5.6bn, which represents an -8% y/y decline.
Q4 ’22 GDP numbers show that the rail sector grew by 3.8% y/y, an improvement over the consecutive contractions of -29.9% y/y and -37.9% y/y recorded in the previous two quarters.
In terms of contribution, rail transport accounted for less than 1% (0.03%) of the transportation sector’s real GDP in Q4 ’22.
Looking ahead, we anticipate an improved revenue outturn in 2023, as the federal government has implemented various security measures to address the security challenges faced by the sub-sector.
