The Lagos-Kano SGR may soon see the light of day as the Nigerian government is currently in talks with the Standard Chartered plc, British multinational banking, and financial services company headquartered in London, to partly finance its implementation.
This was recently revealed by Rotimi Amaechi, the West African country’s minister of transportation. According to Amaechi, the steps with the British banking group were initiated after China, one of the main donors for the project took longer to release funds it had promised Nigeria for the implementation of the project.
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“We are still waiting for the Chinese government to give us the loan we asked for, but there seems to be a delay, which is why we are seeking an alternative,” explained the Nigerian minister of transportation.
Reportedly, the government of the West African country has received from the Chinese counterpart through its lender the Export-Import Bank of China approximately “15% of the US$ 8.3bn financings required for the construction of the line which must connect the commercial center of Lagos to the northern city of Kano.
Lagos-Kano SGR (In the North) project overview
The project is part of the Lagos-Kano Railway project that involves the upgrading of a total of 2,788 km of meter gauge track to the standard gauge track, which has been under development since 2006.
The main objective is to mesh the Nigerian territory and connect, in particular, the localities of the north to the main ports of the country located in the South. There is a planned extension of the network to the city of Maradi, in the center-south of Niger.
Two segments of the Lagos-Kano Railway have already been completed and begun passenger trains. The first segment between Abuja and Kaduna was officially opened in July 2016 while the second segment between Lagos and Ibadan was commissioned in June 2021.
Background
The Lagos–Kano Standard Gauge Railway (SGR) line is a 2,700km railway line which will offer transport connections from the Port of Lagos to Kano, near the border with Niger. Below is the Lagos-Kano SGR project timeline and all you need to know about the project from beginning to the present date.
After Nigeria obtained its independence from Great Britain, the railway lines that were built during the colonial era fell into a state disrepair. The government of Nigeria has since decided to do something about it.
2006
The government of Nigeria awarded China Civil Engineering Construction Company (CCECC) a US $8.3bn contract to construct a Standard Gauge Railway (SGR) from Lagos to Kano. However, due to funding problems for the entire project, the government decided to construct the railway in segments.
2011
Construction of the first segment from Abuja to Kaduna started. The 187km stretch which cost US $876m with Exim Bank of China providing US $500m and the government of Nigeria footing the balance, has since been officially inaugurated and is operational. The segment took almost 5 years to construct.
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2012
The government awarded CCECC a US $1.53bn contract for construction of the second segment which is from Lagos to Ibadan; a 156km stretch.
2017
Ground-breaking ceremony for the second segment (Lagos-Ibadan) took place.
2018
What we reported in march 2018
Nigeria needs US $2bn to revive Lagos-Kano railway line
The Federal Government of Nigeria needs at least US $2bn to revive the Lagos-Kano railway line as part of efforts to boost local and international trade along the Northern and Southern zones. This is according to Professor Yemi Osinbajo, Nigeria’s Vice President.
Speaking during the opening of the inaugural edition of the Lagos-Kano Economic and Investment Summit held at the Jubilee Chalets in Epe, Lagos, Osinbajo said the Federal Government in partnership with a private firm, General Electric (GE) is currently proposing to invest in the project to enhance the movement of cargo from Apapa ports to Kano via the rail line.
Economy growth
Commending the Lagos and Kano State Governors for creating a platform to collaborate for economic growth, Osinbajo expressed optimism that such initiatives will open up the investment opportunities that will benefit both States in terms of investors both locally and internationally.
“I believe that Lagos and Kano States have by this collaboration underscored the cornerstone of the Federal Government’s economic recovery and growth plan, namely the leveraging of synergies among States and between government and the private sector,” said Professor Yemi Osinbajo.
Refurbishing railway project
“The strategic role of the federal government is of course to create an enabling environment for commerce beginning with the provision of infrastructure. “For us, what this meant especially in the context of Lagos and Kano collaboration is the refurbishing of the narrow gauge Lagos to Kano Rail with a concession to General Electric who are proposing to invest almost US $2bn to ensure that the rail route is effective for movement of cargo from Apapa port to Kano,” he added.
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“Similarly, we are investing in the Lagos to Kano standard gauge line, the Lagos Ibadan portion of that is expected to be ready by the end of this year. Also, we have budgeted US $222.9m for the development of special economic zones in the six geo-political zones of the country,” Osinbajo said.
While reeling out plans by the Federal Government on power, the Vice President said arrangements have been firmed up to establish independent power projects to specifically service printers in Somolu area and traders in Sura Market.
He said the Federal Government will keep a close tap on the decisions reached at the Summit and would use it to direct its engagement with State Governments going forward.
“Let me again commend Governors Ganduje and Ambode for this Summit. I want to commend Governor Ganduje for making the long journey to Lagos. I must also say that Governor Ambode deserves special mention for his foresightedness in establishing this collaboration, working with Governor Atiku Bagudu of Kebbi on the famous LAKE Rice and even leasing land from Ogun State to grow rice which I think is another act of collaboration,” Osinbajo said.
Nonetheless, State Governor, Mr. Akinwunmi Ambode said the decision of the State Government to join the Oodua Investment Group triggered what has evolved over the last two years to become a signpost for effective partnerships between Lagos and other States.
Nigerian Minister of Transportation Rotimi Amaechi signed a US $6.68bn contract with CCECC to complete the remaining segments of the project. These segments include: Ibadan-Osogbo-Ilorin (200 km), Osogbo–Ado Ekiti, Ilorin-Minna (270 km), Minna–Abuja and Kaduna-Kano (305 km).
Construction of the second segment (Lagos-Ibadan) was delayed due to heavy spring rains.
2019
Construction was further delayed due to the general elections which threatened to cause unrest hence CCECC had to evacuate its Chinese employees as a precaution.
2020
In August, the Lagos State Government announced closure of Ilupeju bypass between 8:00p.m. on Wednesday and 6:00a.m. on Thursday to allow for the Modernisation Project of the Lagos-Ibadan railway with extension to Lagos Port at Apapa.
In the same month, The Nigerian Railway Corporation, NRC, announced the purchase of 24 coaches to operate the Lagos-Ibadan Railway which was scheduled to commence operations in September 2020.
The rail tracks on the 156km modern rail line from the Ebute Metta Junction to Ibadan were already completed while the 10 major and minor stations were at various stages of completion. The stations along the corridor include Apapa, Ebutte Metta Junction, Agege, Agbado, Kajola, Papalanto, Abeokuta, Olodo, Omi-Adio and Ibadan.
2021
In early April, The Minister of Transportation Mr. Chibuike Rotimi Amaechi revealed that the Federal Government (FG) has borrowed a total of about US $2.5bn towards the Lagos-Ibadan Rail Project cost.
The funds were borrowed from the Export-Import Bank of China, one of three institutional banks in the East Asian country chartered to implement the state policies in the industry, foreign trade, economy, and foreign aid to other developing countries, and provide policy financial support so as to promote the export of Chinese products and services.
The Lagos-Ibadan line is a double-track standard gauge rail, the first of its kind in the West Africa region. It runs from Nigeria’s economic hub and most populous city, Lagos, to Ibadan, the capital of Oyo state, with a total of 10 stations.
With trains operating at a maximum speed of 150 km/h, the infrastructure according to the contractor, China Civil Engineering Construction Corporation (CCEC), cut the travel time between the two cities to two hours.
The Minister explained that the Federal Government made a decision to borrow US$ 2.5bn towards Lagos-Ibadan Rail Project cost, which was not part of the original plan, to extend the rail line to the nation’s seaports for “the economic benefit associated with it”.
“We had to take about 45km rail from Ebute-Metta into Apapa seaport. There is an additional one connecting Tincan Island Seaport to Apapa,” he explained.
In late May, Minister of Transport, Rotimi Amechi, announced that works on the Kano–Kaduna angle of the Lagos–Kano SGR project will kick off by July, 2021.
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