Business

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

Published

4 years ago

November 30, 2020

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

Business

Ex-Twitter CEO Jack Dorsey locked out of X account

Published

16 hours ago

March 13, 2025

Trends Admin

Ex-Twitter CEO Jack Dorsey locked out of X account

Jack Dorsey, the co-founder and former CEO of Twitter, has reportedly been locked out of his account on X, the social media platform that succeeded Twitter under Elon Musk’s ownership.

The news broke on Wednesday night, when Dorsey posted about the issue on Primal, an alternative social media network, stating that his X account had been restricted with an 11-hour lockout period remaining as of that date.

“We have determined that you have violated the X rules, so you’ll need to wait some time before using X again.

“You’ll be able to unlock your account in: 11 hours and 3 minutes,” Jack shared on Primal.

Dorsey’s lockout has caused numerous speculations among X users, though the platform has provided no official explanation.

Dorsey, who stepped down as Twitter’s CEO in 2021, has remained an influential figure in the tech world. His unexpected account restriction has raised eyebrows, particularly given his foundational role in building the platform that X evolved from.

Ex-Twitter CEO Jack Dorsey locked out of X account

Business

Petrol import rose by 105.3% in 2024 – NBS

Published

2 days ago

March 12, 2025

Trends Admin

Petrol import rose by 105.3% in 2024 – NBS

Petrol imports surged by 105.3 per cent, reaching N15.42 trillion in 2024, from the N7.51 trillion recorded in 2023. This was contained in the latest data on foreign trade statistics released by the National Bureau of Statistics (NBS), yesterday. The development comes despite current increasing domestic refining capacity, and the ongoing rehabilitation of state-owned refineries.

Previously, the country had spent N2.01trillion on fuel imports in 2020; in 2021, this figure more rose to N4.56 trillion, or 126.9 per cent; N7.71 trillion or 69.1 per cent in 2022, before recording a marginal decline of 2.6 per cent to N7.51 trillion in 2023.

However, riding on the back of a 40.9 per cent depreciation of the naira, in 2024, the import a 105.3 per cent increase to N15.42 trillion, the highest on record.

Despite the rise in local refining, production remains insufficient in meeting demands, necessitating continuous dependence on importation.

Supply chain inefficiencies, and persistent demand-supply imbalances, foreign exchange fluctuations, among other factors, have also militated against meeting local demands, as the rising cost of petrol imports continues to strain government finances and consumer purchasing power.

Petrol import rose by 105.3% in 2024 – NBS

Business

High expectations as petrol price may drop to N800/litre

Published

2 days ago

March 12, 2025

Trends Admin

High expectations as petrol price may drop to N800/litre

The downstream oil sector in Nigeria is witnessing intensified competition as major oil marketers slash prices, challenging the N825 per litre gantry loading cost set by the Dangote Petroleum Refinery.

This move follows revelations by industry players that the landing cost of imported Premium Motor Spirit (PMS) has dropped to N774.72 per litre, reflecting a N50.28 reduction from Dangote’s loading price. The landing cost factors in expenses such as shipping, import duties, and exchange rates, contributing to the overall decline.

Dealers suggest that the ongoing price drop could soon lead to a reduction in pump prices to around N800 per litre, offering some relief to consumers already grappling with high fuel costs.

The situation, according to industry stakeholders, has ignited a price war, with retail marketers now opting to dump the refinery products for imported products on the basis of lower pricing.

Findings by this newspaper also revealed that this decrease in landing cost is expected to influence the price at which petrol is sold to consumers and could increase marketers’ interest in returning to petrol imports.

“Crude oil is a major component in the production of fuel, so a further reduction in its price would definitely warrant a drop in petrol price, and it is possible to drop to N800 per litre,” the National Publicity Secretary of the Independent Marketers Association of Nigeria, Chief Ukadike Chinedu, stated.