Currently, the importance of railway is being realized globally, as developing countries seek for financial assistance to build their own railway system. More and more countries are investing in rail. It has gradually come to appoint that though building roads can be beneficial, it is not a sustainable solution to do so in addressing the transportation issues particularly heavy traffic for most countries. The presence of railway indicates the state of a country’s transportation system and hence its economy as a whole. Nigeria is one of several other countries who are looking into investing in this vital component of a successful economy.
Through the leadership of Nigerian President Muhammadu Buhari, Nigeria is now on its way to a progressive transport system. On the other hand, this is yet to be approved by the lawmakers. This loan from the Export-Import Bank of China amounts to almost 6 billion dollars. China has always been very aggressive when it comes to infrastructure investments. In contrast, its fellow superpower, US have flunked on these criteria in recent years. On the other hand, more investment amounting to 1 trillion US dollars is to be made under the current administration, according to news about Donald Trump.
Clearly, the US has some catching up to do in this field if they want to be running on the same level as China also investing not only within their territory but overseas via loans to developing countries such as that of Nigeria and other parts of Africa. These projects include Kenya railway and the Chinese-built East African Railway. In addition to this, the president also moved the Senate to approve another 1.23 billion dollars loan from Eximbank for another railway project.
The Nigerian Railway ideally will have to start operation by 2019, as mandated by the president. This project is expected to relieve the country from the effects of a recession. Once implemented, the Nigerians will benefit in several ways from the project as this will not only lead to increased travel time savings but to reduce transportation cost of goods. The construction of a railway system leads to a better quality of life for the Nigerians.
This will lessen then congestion of road traffic and prolong the life of constructed roads. In effect, this will save the Nigerian Government the investment needed to create traffic control policies and road rehabilitation. The benefits of the said project, once implemented, may also be witnessed not only post but during construction. Building the railway system will create more jobs for Nigerians to occupy and hence create another positive impact to the economy.
This can be done so if the government also equips the Nigerian Workforce with the technical knowledge necessary to qualify for the positions that will be made available by the project. In addition to this, also emphasize on the priority to hire the locals instead of hiring foreign workers to do the job that a Nigerian Engineer can deliver.
On the other hand, what will the benefits be for China? China’s investment in African Infrastructure Projects has rapidly increased. This may be mutually beneficial for them not as far as what the loan could earn but the businesses for the Chinese that will be boosted by the railway construction. This will open the construction playing field to various Chinese Construction Companies who are also seeking to do a project in Africa.
This puts them in advantage, given that the Nigerian Railway is Chinese-funded. Furthermore, if a Chinese Contractor wins this project to construct the railway, China’s manufacturing sector is also expected to grow, especially that China’s trains are becoming more and more competitive with the trains in Europe and Japan.