This document discusses a financial strategy to mobilize additional funding for the construction of 600 kilometers of railway lines in Nigeria over the next five years. It notes that infrastructure such as railways is needed to ease pressure on roads and stimulate the economy. The estimated $12 billion cost of the railway expansion is half of Nigeria's annual budget, so additional funding sources beyond public and private domestic options are needed. The document proposes working with multilateral development organizations to structure public-private partnerships, blended finance, impact bonds, and other mechanisms to mobilize private investment and risk mitigation for the project.

1. Financial strategy to mobilize
additional funding for the
construction of 600 kilometers of
railway lines in Nigeria over the
next five years
Mr Chibuike Ezeogu
Planning Officer, Ministry of Finance,
Abuja

2. BACKGROUND
• Poor and inadequate infrastructure is one of the
problems bedeviling Nigeria and most of the third
world countries.
• Poor and dilapidated roads in Nigeria leads to
traffic congestions, loss of man-hours, accidents,
breakdown of vehicles, among other social and
economic problems.
• The country has limited functional railway lines
making the citizens to depend mostly on roads for
movement of goods and services.
• Also, water and air transportation in the country
are poorly developed

3. The present government in Nigeria has identified
the transport sector as a priority area to be given
serious attention with the potential for social and
economic gains to the government, citizens and
potential investors.
Rail transportation is of particular interest as it will
ease the pressure on roads, reduce traffic
congestions, improve speed of travel, create
thousands of job opportunities, generate revenue,
stimulate other sectors of the economy and help
reduce the climate impact of transportation in the
country.

4. • Global estimates for the construction of 1 km of
railway line with composite infrastructure is around
$20 million and the proposed 600 km in Nigeria will
cost about $12 Billion (almost half of the total budget
of the country in 2019)
• The country has both public and private funding
sources internationally and domestically
• Official Development Assistance (ODA) at $3.74 billion
tops the international public finance source while
crude oil exports and tax revenues are the major
sources of domestic public finance
• Personal remittances at $22 billion tops the private
international sources of finance followed by foreign
direct investments (FDI) at $3.49 billion.
• Local private sources of finance include the capital
markets and sale of government bonds.

5. • Funding from the above sources are inadequate for the
developmental needs of the country, capital and recurrent
expenditures/overhead costs and also debt service.
• Hence, the need for additional and improved sources of
funding becomes imminent. We seek the assistance of
Multilateral Development bodies such as the World Bank
Group to help structure the financing of the project. This
can be in the form of
 mobilizing private investment,
 structuring a public-private partnership with international
companies,
 blended finance and guarantees,
 impact bonds, or
 providing financing and risk mitigation instruments

6. We are open to initiatives that have succeeded in
other regions and the Government commits to
providing the enabling environment for the project
to be successful such as political stability,
environmental, social and governance (ESG)
policies, financial market regulations, tax policies,
debt management, among others.
The government will support cooperation and
coordination among different ministries, regulatory
bodies, and other relevant public actors—and
facilitate dialogue with the private sector and other
non-state actors

7. The government also plans to set up monitoring,
review and accountability policies and establish
governance and coordination mechanisms to see
that the projects succeeds.
THANK YOU