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Abuja-Kaduna train breakdown: A taste of the Chinese pudding

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The Abuja-Kaduna train breakdown that happened last week presents a good illustration of the age-old adage that says: the taste of the pudding is in the eating. From all indications, the taste of the pudding which China is cooking for Nigeria is beginning to emerge already.

For over ten hours, some Nigerians were stranded in the middle of no-where, abandoned in the bush as a result of a failed locomotive. The train ride with all the luxury it purports to offer left a very sour taste in the mouths of the passengers, as they were buffeted by hunger and thirst for several hours, not to talk of failed appointments and the deep fear of being kidnapped due to high level of insecurity around that corridor.

There can be no gainsaying the fact that the breakdown of the locomotive is a foretaste of what is to come. The incident seems to tell Nigerians what the situation will be in the next five to ten years. Unfortunately, a taste of it couldn’t wait. As the transportation minister, Rotimi Amaechi, has said the embarrassing incident is so early in the day, and is quite unexpected. We quite agree with him. If this can happen at this time, less than one year of operation, one can imagine what the case will be in the next ten years.

True, the breakdown of the locomotives was not expected at this time by Amaechi and  the government of the day. This is because the Nigerian government officials either trust the Chinese so much or have chosen to underestimate or ignore the famed craftiness and propensity of the Chinese to cut corners. On the other hand, it could be because Nigeria has become a beggar before China, and as the saying goes, a beggar has no choice. In that light, she must take whatever China throws her way.

Indeed, one cannot talk about the train breakdown incident without talking about how the contract that gave birth to it was procured, same with other ongoing rail projects across the country.

These rail projects are being executed with loans from China. The loans are tied to projects and disbursed by the China EXIM Bank, with the interest said to be  subsidized by the country’s Ministry of Commerce. The commerce ministry assigns Chinese contractors to execute projects.

With such an arrangement, the project becomes entirely Chinese affair. The money barely gets into the hands of Nigeria since the loans are offered in the form of projects. Thus, most of the funds given out actually go back to China by way of supplies, salaries, allowances and housing of top and middle-level manpower, construction contracts and the whole equipment which are brought in from China.

With all the equipment, including the locomotives coming from China as part of the loan deal, Nigeria is not in a position to know or determine the competitive cost and  quality of the equipment. Nigerian negotiators will not know if the shiny locomotive is new or refurbished. All they do is to celebrate the arrival of the locomotives from China, and when everything is put together, they assemble to commission it with fun fare. How long the locomotive or equipment will last is another issue as there is no performance bond signed.

With what has begun to emerge so early in the day, one is afraid how Nigeria will be able to repay  the loans, given envisaged breakdowns which might impact on the operation of the railways. The breakdowns, if they become frequent and severe, may render some rail lines unviable, and therefore, disposed to take-over by the Chinese. The story of China loan/infrastructure projects in the developing countries especially, Africa presents a frightening scenario.

Across the African continent, in most of the transactions with China, corruption or kickbacks by government officials have been alleged. The loans are largely concessionary with lots of suspected undercover dealings and perks in favour of African government officials. These come in form of huge kickbacks, which largely do not go through the banking system.

The presence of the kickbacks indicates that the actual cost of investments in the projects will actually fall far short of negotiated loan amounts. This is a cause of worry concerning future default on these Chinese loans.

Another source of worry is the opaqueness of the Chinese projects and loans across all jurisdictions. In every country that China has shown its ‘magnanimity’, all the infrastructure of roads, ports, highways, railways and airports financed with these loans all connect to China in what has been aptly described as the “new silk road.” This means, perhaps, that these infrastructures are forever tied to China.

One curious thing is while China can give Nigeria refurbished locomotives or inferior equipment without batting an eyelid, it is willing to ‘donate’ to her a transport university said to worth $50 million. The amount even a kindergarten pupil knew that might have conveniently built into the inflated cost of the railway projects.

This is similar to its donation of a mighty Secretariat to the African Union Commission in Addis Ababa, Ethiopia – a gesture which has provided it a good launching pad to gain easy access to virtually all African countries, offering them irresistible loans that are tied to projects. The secretariat was also rumoured to be a mine of classified information for Chinese as they allegedly installed high tech spying gadgets all over the building during its construction.

While the Minister of Transportation, Rotimi Amaechi, and the managing director of NRC Fidet Okhiria, have apologized to Nigerians, with the NRC MD promising that the breakdown will not occur again, Nigerians remain skeptical of what the future holds for all the Chinese largesse for Nigeria.

* Business & Maritime West Africa Saturday Editorial

 

Railway

Just in: Nigerian railway suspends Abuja-Kaduna train services over safety

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The Nigeria Railway Corporation has announced the suspension of train services on the Abuja-Kaduna route.

It said on Thursday that the decision was taken for safety purposes after a section of the rail track was vandalised on Wednesday night.

Some Kaduna-bound passengers were reportedly forced to return to Abuja following the damage to the track.

An ex-senator representing Kaduna Central, Shehu Sani, had tweeted on Thursday that there was a bandit attack on an Abuja-Kaduna train he was travelling in and had a miraculous escape with other passengers.

But the Managing Director of the Nigerian Railway Corporation (NRC) Mr Fidet Okhiria, said it was an attack by vandals on the rail track.

The corporation said in a statement on its website on Thursday that train services had been suspended on Abuja-Kaduna route for the safety of passengers and crew members.

It added that efforts were being put in place to ensure maximum safety along the route.

It also further information about the suspension would be conveyed to the public later.

Daily Trust reported that hundreds of passengers were stranded at Rigasa Railway Station in Kaduna on Thursday morning.

The report stated that most of the passengers that booked ‎their train tickets online later resorted to travelling by road.

An NRC official at the station told the passengers that there was a problem with the train and so there would be no train.

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CBN introduces N500m entrepreneurship grants for graduates, undergraduates

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The Central Bank of Nigeria says it will support youths in tertiary institutions with grants to promote entrepreneurship and reduce unemployment and reduce the trend of graduates seeking white-collar jobs but turn their attention to the creation of jobs.

It said the initiative called Tertiary Institutions Entrepreneurship Scheme, would be executed in partnership with Nigerian polytechnics and universities to harness the potential of graduate entrepreneurs (gradpreneurs).

It stated this in a circular, titled ‘Guidelines for the implementation of tertiary institutions entrepreneurship scheme’, dated October 2021.

The apex bank stated that the goal of the TIES was to enhance access to finance to undergraduates and graduates of polytechnics and universities in Nigeria with innovative entrepreneurial and technological ideas.

The CBN stated, “The scheme is designed to create a paradigm shift among undergraduates and graduates from the pursuit of white-collar jobs to a culture of entrepreneurship development for economic development and job creation.”

The CBN said it would distribute N500 million among the top five tertiary institutions with the best pitch.

“Five top Nigerian polytechnics and universities with the best entrepreneurial pitches/ideas shall be awarded as follows: first place – N150m; second place – N120m; third place – N100m; fourth place – N80m; and fifth place – N50m,” it stated.

The apex bank stated that it ”shall constitute a Body of Experts (BoE) from the private and public sector for the biennial regional and national entrepreneurship competitions to evaluate entrepreneurial and technological innovations submitted by Nigerian polytechnics and universities. The Body of Experts (BoE) shall recommend projects with high potential and transformational impact for the grant award.”

It gave the key highlights of the scheme as projects financed under the Scheme shall be monitored by independent monitors jointly engaged by the CBN and PFI; would be operated for 10 years in the first instance (not exceeding 31st December 2031) depending on the complexity of the project; interest payment and principal repayment should be made on a monthly or quarterly basis by the obligor depending on the established cash flow cycle and in line with the approved repayment schedule.

 

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As cooking gas price rises further, kerosene, diesel drop

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As prices of cooking gas otherwise known as Liquefied Petroleum Gas (LPG) across Nigeria continue to rise despite significant increase in local production of the product, the average pump price of National Household Kerosene (NHK) has dropped to N400.01 per litre, representing a 7.9 per cent decline compared to N434.39 per litre in September this year.

Prices of Automotive Gas Oil (diesel) also fell by 0.16 per cent this week to N254.21 from N254.64 as of September ending 2021.

According to the latest report on the LPG by the Nigerian National Petroleum Corporation, the product supplied in September 2021 increased to 49,453.081 metric tonnes, MT, shows an increase of 23 per cent when compared to 38,040.457MT recorded in August 2021.

A survey by newstrends shows that 12.5 kilogramme of cooking gas, which was sold at N4,000 in January 2021, rose to N7,200 in August 2021 and currently N7,700.

On kerosene, latest data from globalpetrolprices.com indicated that as of this week, the price per gallon of kerosene stood at N1,514.20 while price per gallon of  diesel stood at N962.29.

When compared to statistics from National Bureau of Statistics (NBS) the kerosene and diesel watch for September, prices paid per gallon of the NKH fell by 1.73 per cent.

The NBS September report, “Average price per liter paid by consumers for National Household Kerosene increased by 8.6 per cent month-on-month and by 24.8 per cent year-on-year (YoY)  to N434.39 in September 2021 from N400.01 in August 2021.

“Similarly, average price per gallon paid by consumers for National Household Kerosene increased by 16.25 per cent MoM and by 25.3 YoY to N1, 540.82 in September 2021 from N1, 325.39 in August 2021.

“States with the highest average price per gallon of kerosene were Abuja (N2, 766.67), Bauchi (N1, 981.54) and Adamawa (N1,975.00).

“States with the lowest average price per gallon of kerosene were Delta (N1218.13), Imo (N1991.23) and Yobe (N1,080.00).”

On diesel, the NBS said, “Average price paid by consumers for Automotive Gas Oil (diesel) increased by 0.17 per cent MoM and by 15.9 per cent YoY   to N254.64 in September 2021 from N254.21 in August 2021.”

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