This is the destination: “Following the revenue losses, corruption and underperformance that have characterized the Nigerian Railway Corporation (NRC), the federal government is exploring privatization as a means of making rail transport service in Nigeria efficient.” And you can add federal universities to that list depending on how the 2023 election turns out. The public sector is fading fast. Yet, privatizing public assets like the national grid,  railways, airlines, etc will not save Nigeria.

Until the rule of law works, the path to ascension will not happen. There are many untouchables, and when you privatize, you hand over those assets to them. They will mismanage them knowing that you would be frustrated. Then, you come back and bail them out (NEPA/Disco)

Rule of law must be applied with the “blindness of law and justice” urgently in Nigeria. Today, Nigeria is not doing that and that is why nothing is working. Unfortunately, before his anointing with a second cap as president, many would have expected Buhari to deal with the demons.

But here we are: A few years ago, I took a train from Abuja to deliver a lecture in  the Nigerian Defence Academy (NDA) Kaduna. Right there, people were cheating the government. Some people had bought all the available tickets in the train and were reselling at mark-ups. My question was this:  why can’t these fellows be arrested? Cheat sheet: they are agents for someone!

“The private sector is the engine of growth. Let someone else operate your lines efficiently,” Sambo said. “We cannot have an agency that is owner, regulator and operator at the same time.”

Nigerian railway service has been bedeviled by factors ranging from inefficient service to corruption under the NRC, and the government has appeared helpless in the face of it all. In 2020, shortly after the launch of Abuja-Kaduna rail line, Nigerian investigative journalist, Fisayo Soyombo, uncovered high level ticket racketeering and other forms of malfeasance perpetrated by the officials of the NRC.

Though following the investigation, the government has moved to curtail corruption in the system by contracting a private firm as a concessionaire in a 10-year deal to digitize and manage train tickets, most of the challenges have remained.

Nigerian Government Explores Privatizing Its Railway Service

Following the revenue losses, corruption and underperformance that have characterized the Nigerian Railway Corporation (NRC), the federal government is exploring privatization as a means of making rail transport service in Nigeria efficient.

The move was announced by the Minister of Transportation, Mu’azu Jaji Sambo in Abuja on Friday, during a courtesy visit by members of the NRC Governing Board. The minister stated that the government’s move to unbundle Nigerian rail transport service stems from the principle that the NRC cannot be the regulator and at the same time the operator.

“The private sector is the engine of growth. Let someone else operate your lines efficiently,” Sambo said. “We cannot have an agency that is owner, regulator and operator at the same time.”

Nigerian railway service has been bedeviled by factors ranging from inefficient service to corruption under the NRC, and the government has appeared helpless in the face of it all. In 2020, shortly after the launch of Abuja-Kaduna rail line, Nigerian investigative journalist, Fisayo Soyombo, uncovered high level ticket racketeering and other forms of malfeasance perpetrated by the officials of the NRC.

Though following the investigation, the government has moved to curtail corruption in the system by contracting a private firm as a concessionaire in a 10-year deal to digitize and manage train tickets, most of the challenges have remained.

Recently, the NRC was forced to shut down train services due to insecurity and the high cost of diesel. The Chairman of the NRC Board, Engr. Ibrahim Alhassan Musa, had told the minister that they’re running at loss due to the high cost of diesel pushing the running cost of the trains so high.

The latest challenges are yet to be addressed by the government, scuttling Nigeria’s chance of repaying the loan taken from the Chinese Exim-bank to finance the railway project.

Sambo told the Board that the government is working to ensure the resumption of rail services. He explained that commercial train operations will resume after security measures were installed to prevent further terrorist attack on the rail infrastructure and train passengers.

“We are looking at how the rail lines can be safe by putting 24 hours surveillance and immediate response apparatus.

“The security measures will include short and long term plans, with the short term plans taking effect from November,” he said.

In March, scores of train passengers were killed and abducted on the Abuja-Kaduna route, sparking apathy for train trips across the country. Sambo said that in addition to the security measures that the government is putting in place, he had told Nigerians that rail services will resume operation only when those kidnapped in the Abuja-Kaduna train service have regained their freedom and are reunited with their families.

“I have told Nigerians that I will not run the services until every captive is released. We are lucky today, they are all released and reunited with their families. We are also lucky that all of them are back alive and were all given proper medical care,” he said.

As part of the government’s plan to unbundle train transport service, Sambo said that a National Transportation Policy that will articulate a seamless transportation system for the country will soon be launched. The minister said the Board should be ready for it by looking for alternative sources of cheaper and cleaner energy for the transport sector.

Taking train services off the hands of the Ngerian Railway Corporation has long been touted as key to sanitizing the system and creating revenue growth. But it is not clear when the government intends to make it happen.

In Tekedia Capital, I push our founders NEVER to ignore a web strategy in Nigeria and broad Africa. Despite the broad slogan which posits that Africa is mobile-first (yes,  build mobile apps before anything) and in extended case mobile-only, if you look at the real data without the US-influenced slogan,  Africa is not mobile-first when you move away from social media. 

From our data which drives our investment model, when your product is not Facebook, Instagram, TikTok  and the like, the struggle to find space in many African smartphones becomes harder. People use social media daily and that means they can install the apps. But apart from social media, what else do we use daily that requires most Africans to budget storage spaces in their limited storage-capacity-phones?

If you use it once a week, why must it be installed as a mobile app when you can use the web app (i.e. browser-based) and get the same thing done? For most Nigerians and Africans, once Facebook and Instagram have taken their positions, the phone has limited spaces to accommodate other apps. What happens is clear: even the bank apps lose out because social media apps have taken their positions!

And the big one, for companies, who want to run a company with mobile-only fintech solutions? Would the app be installed in the accountant’s mobile phone or the CEO’s or who? But in Nigeria, you have many fintechs which do not offer web apps. 

Those companies are making big mistakes since most companies will NEVER allow  company financial assets to be accessed via personal mobile phones (or company-issued mobile phones). What they do is to have dongles which are locked to dedicated laptops or desktops for security. If you do not have web apps, those companies cannot be your customers.

Yes, when you see those startups which offer only mobile apps without web apps, run away from them because they do not understand what moves markets. According to government data, the total value of web apps transfers was N294 trillion naira (against mobile apps’ N48 trillion) over 3.6 billion (mobile did 764 million) transactions in 2021. This shows clearly that a web app strategy will deliver great value and under no account must you be fixated on mobile apps, neglecting the most important channel which drives growth.

Feedback On Feed

Comment #1: Valid points Prof , Ndubuisi Ekekwe. I’m curious about the breakdown of the Web data. It seems that most of the merchant transactions which are routed through processors ( Flutterwave, Paystack, etc.) bind to that data point even if it’s mobile web. And then the transactions through banking apps bind to the Mobile app data point.

I was looking at the NBS sheet earlier today, it didn’t give any other details on how the data were categorized.

My Response: certainly, a mobile web transaction is web (both are done via browsers). And most of those web transfers are done via smartphones. But mobile web transactions are different from mobile-app transactions. My point is that most startups do not even give you the option to use your browser (web-based) to access their products unless you install their mobile apps.

… A browser based transaction on your phone is web-based (not mobile app). So, most of those web transactions are done with smartphones. NBS did not say smartphone transactions. You can do web transactions on phone, desktop and laptop. But you can only do mobile-app transactions on phone.

Comment 1b: This is true, and the fact that most Startups track the Number of downloads as their most important metric adds to the pitfall.

Comment #2: True that Prof  When one wants to make heavier transactions and a call for more security – some Apps will prompt that you finish the setup/transaction over the web. And because people still go on web to search, research and review, such people could easily be asked via digitally tracking and mapping of their interests, and suggestively made to take a decisive action immediately on the web