Policy plans shape Nigeria's transport infrastructure and mid-term macroeconomic development


Africa’s largest economy and its 14th-largest geographically, Nigeria has seen much of its transport network fall into disrepair in the wake of unprecedented recent economic and population growth, as well as decades of under-investment in critical transport infrastructure.

The country’s expansive road network spans nearly 200,000 km, although the majority of this is unpaved and in need of maintenance, while major urban centres including Lagos have long suffered from crippling congestion, with vehicle ownership rising while development of mass transit systems has stalled. The country’s 3500-km rail network has also deteriorated, with cargo volumes falling to all-time lows in the early 2000s, exacerbating highway maintenance challenges, and weighing on trade and economic growth.

Recognising transport as the lynchpin to unlocking new and non-oil economic growth and trade, the government of Nigeria has heavily emphasised transport investment, particularly from the private sector, in recent economic development plans.

Mid- and long-term policies seek to upgrade, rehabilitate and maintain thousands of kilometres of highway and rail lines, with private sector investment and cost-sharing public-private partnerships (PPPs) seen as the best way to expedite implementation. PPP deployment has already paid off in the port segment, where operations showed a noticeable improvement following an ambitious privatisation agenda launched in 2005.

Reaching Milestones

Despite the challenges, the transport sector has hit several major milestones in recent months. Abuja’s long-awaited light rail service began operations in July 2018, with Lagos set to welcome its own rail mass transit system once the first line of its metro line, currently under construction, is complete. Construction commenced on a new Lekki deep seaport, and in the aviation segment, construction of four new airport terminals, as well as a planned new airport in Lagos, while a new terminal in Abuja is expected to come online before the end of the year, all of which should help the country meet rising air passenger demand. Recent regulatory reforms and a pan-African aviation agreement have significantly bolstered the country’s aviation growth prospects.

The country has also adopted several important measures aimed at boosting private investment in the roads sector, including a tax incentives scheme and the establishment of new toll booths on major highways.

Although budgetary shortfalls and project delays remain a concern, the country is making steady progress in expanding its transport network, which should support an ongoing economic recovery and significantly bolster macroeconomic indicators in the coming years.


The Federal Ministry of Transport (FMT) is responsible for most transportation-related policy-making and implementation in Nigeria, overseeing parastatals including the Nigerian Airspace Management Agency, Federal Airports Authority of Nigeria (FAAN), Nigerian Civil Aviation Authority (NCAA), Nigerian Maritime Administration and Safety Agency, Nigerian Railway Corporation (NRC), Nigerian Ports Authority, Nigerian Shippers’ Council, and National Inland Waterways Authority, among others.

Recent transport investment has been guided by two major policy documents – the Nigeria Integrated Infrastructure Master Plan (NIIMP), running from 2014 to 2043, and the Economic Recovery and Growth Plan (ERGP), a mid-term macroeconomic development agenda covering the period from 2017 to 2020.

NIIMP serves as a far-reaching infrastructure roadmap that aims to strengthen multi-modal linkages, as well as institutional, legal and policy frameworks, in order to expedite delivery of crucial projects. Its transportation portfolio covers all segments, prioritising refurbishment and expansion of cross-national highway networks including highway dualisation, rehabilitation of existing rail lines and construction of new tracks. Also included in the plan are infrastructure upgrades at 11 airports across the country, boosting inland water transport and construction of two new seaports, as well as upgrades of the country’s existing seaport network, and improvements to urban transport networks, including new buses, bus terminals and dedicated bus lanes, motor parks, and traffic control systems.

Transport Goals

The NIIMP emphasises road development, and targets allocating 50% of planned investment – up to N20bn ($64.7m) of annual spending to meet its targets – to expanding national highways and regional road networks, as well as multi-modal hubs such as rail stations, ports and airports.

More recent strategic planning emphasising innovative methods to finance the country’s growing infrastructure deficit came with the ERGP, which sets ambitious short-term development targets for all transport sectors, emphasising private sector investment in new infrastructure projects.

With the ERGP targeting development, the plan reports that Nigeria will need to invest $3trn into infrastructure over the next 30 years. It calls for $30bn of near-term borrowing to close its infrastructure deficit, as well as cost-sharing financial frameworks and new fundraising tools to be supported by the private sector. These include PPPs, as well as infrastructure bonds, diaspora bonds and value-capture financing.

According to its February 2017 report, the ERGP’s transport infrastructure programme includes several targets aimed at improving private sector participation, including the establishment of a robust capital project development framework to boost PPP deployment, reforms to the Infrastructure Concession Regulatory Commission (ICRC) Act to eliminate regulatory arbitrage with the Bureau of Public Enterprises and Bureau of Public Procurement Act, and creation of a tolling policy for maintenance and tolling concessions to the private sector, which will in turn enable the government to use funds for maintenance of other critical road networks, as well as invest in the energy and agriculture sectors.

Recent Growth

The National Bureau of Statistics (NBS) reports that the country’s transport and storage sector is comprised of six activities: road, rail, pipeline, air, water transport, transport services, and postal and courier services. Combined, the sector grew by 38.56% year-on-year (y-o-y) in nominal terms during the second quarter of 2018, against 2.17% y-o-y growth recorded in the second quarter of 2017, and 18.73% in the first quarter of 2018. The air transport segment grew the fastest, at 43.54% y-o-y in the second quarter of 2018, followed closely by road transport growth, at 41.07%. According to NBS, the transport and storage sector contributed 1.71% to nominal GDP in the second quarter of 2018, against 1.4% in the second quarter of 2017 and 1.85% in the first quarter of 2018.

In real terms, the sector grew by 21.76% y-o-y in the second quarter of 2018, nearly 28 percentage points higher relative to growth during the second quarter of 2017, and up 7.31 percentage points from the first quarter of 2018, equating to a 10.43% q-o-q contraction. The sector’s contribution to real GDP hit 1.3% in the second quarter of 2018, against 1.09% in the second quarter of 2017, and 1.5% in the first quarter of 2018.

Reducing congestion and boosting trade flows are important priorities for stakeholders, with transport upgrades viewed as beneficial to growth in Nigeria’s interior and northern regions, and the government has channelled much of its transport spending into highway construction and roads rehabilitation (see analysis).

However, expanding urban light rail and national rail networks will be equally critical to reducing chronic road and border congestion in the country.


Rail development in Nigeria dates to 1898, when the British colonial government began construction on a 193-km line connecting Lagos to Ibadan, which was completed in 1901. The NRC traces its roots back to the Government Department of Railways, which was created by amalgamation of two state-owned rail services in 1912. The NRC was officially created by the Nigerian Railway Corporation Act in 1955.

The core of Nigeria’s current rail network, including the 640-km Bornu extension, running from Kano to Maiduguri, was completed in 1964, creating a two-line network, commencing in Lagos and Port Harcourt, and stretching north-east. The NRC reports that the current network comprises 3505-km route and 4332-km track of 1067-mm lines, as well as a 19-km, 1067-mm gauge extension from Port Harcourt to the deepsea Onne Port, and 277 km of standard, 1435-mm gauge track running between Ajaokuta and Warri via Itakpe. Rail investment, maintenance and operations have slumped since the 1960s, with cargo volumes falling from 3m tonnes in 1965 to just 15,000 in 2005.

After the Nigerian economy fell into recession in 2016, the federal government unveiled a series of bold plans including the ERGP, which seek to both revive the country’s non-oil economy and kick-start new growth. These plans extended to rail development, and in August 2017, the federal government announced it had begun a $41bn railway expansion plan aiming to boost economic diversification by improving shipping networks between seaports and the interior.

As highlighted by ERGP, the government plans to build two new railway lines: an 1100-km line connecting its two largest cities, Lagos and the northern city of Kano, which will carry freight and passengers, as well as a coastal railway connecting Lagos to Calabar in the east.

Bloomberg estimates that the two projects will cost $20bn, with most of the funding expected to come from the Export-Import Bank of China, which had already released $5.9bn to fund the projects as of August 2017.


Additionally, an international consortium led by GE is currently moving to rehabilitate the country’s narrow-gauge rail lines connecting Port Harcourt and Lagos with the north, with plans to invest $2.2bn into the project, according to the FMT. Once these projects are completed, Nigeria will have two links between Lagos and Kano, with the new, Chinese-built line enabling passengers and cargo to travel at double the speed of the existing network.

In April 2018 the federal government signed an agreement with the GE consortium, which includes China’s Sinohydro, South Africa’s Transnet, and the Netherlands’ APM Terminals, to proceed with the interim phase of a contract to upgrade the country’s 1067-mm narrow-gauge rail network.

The scope of the work includes infrastructure rehabilitation, as well as supply of 10 new locomotives and 200 wagons, which will be added to NRC’s existing fleet, allowing the corporation to boost passenger services and supporting projected cargo growth of 500,000 tonnes annually, from current levels of less than 50,000 tonnes annually.

After the interim phase is completed, NRC plans to purchase an additional 200 locomotives, as well as new rolling stock, under a substantive phase entailing comprehensive infrastructure rehabilitation. Chibuike Rotimi Amaechi, minister of transportation, described the project as a milestone for the country.

According to an August 2017 Bloomberg report, the government also plans to allocate $16bn of public and private investment for an expansion project linking all state capitals, eventually extending the network across its northern border to connect with Maradi, a city in southern Niger, as well as complete a $3bn line from Abuja to Warri, a Nigerian city in the south.

Urban Rail

Commuters in Abuja and Lagos are also slated to benefit from two urban railway projects – the Lagos Rail Mass Transit (LRMT) project and Abuja Light Rail system, both of which have made significant progress within recent years.

Under development since 1983, the LRMT project is a planned network of seven high-speed urban rail lines – blue, red, green, yellow, purple, brown, and orange – expected to significantly reduce chronic congestion in Lagos. The blue line is currently under construction, to be followed by the red line, with the remaining five lines scheduled for construction after the red and blue lines have come online, the latter of which will become operational in 2022 at a cost of N70bn ($226.3m).

The 27-km blue line will run from the Marina via the National Theatre and Mile 2 to connect with Okokomaiko in western Lagos. It is being built in phases, the first of which is an 8-km stretch linking the National Theatre to Mile 2, and comprising four stations. Its 4-km second phase will link three stations from the National Theatre across the Lagos Lagoon to Marina.

The 31-km red line, which shares three stations with the blue line, will connect Marina to Agbado, while a planned 6-km red extension will connect to domestic and international terminals at Lagos’ Murtala Muhammed International Airport (MMIA).

The 26-km green line will link Marina to a proposed new airport in Lekki, the 34-km yellow line will connect Otta to Iddo, and the 60-km purple line will link Redemption Camp to Ojo. The 42-km orange line will run between Redemption Camp and Marina, while the 20-km brown line will run from Mile 12 to Marina.

Light Rail Progress

In April 2018 Ladi Lawanson, state commissioner for transportation, reported construction on the first phase was 98% complete. In July 2018 the Lagos Metropolitan Area Transport Authority signed a letter of intent with French rail transport firm Alstom to electrify both phases of the blue line, and assist the government to secure funding from export credit agencies to procure new metro trains, install modern signalling systems, and build an operation and control centre, passenger information system, and fare collection infrastructure in the second phase.

China’s CRRC, the world’s largest rolling stock manufacturer, built a fleet of 15 trains for the blue line’s first phase in 2016, although construction delays have since pushed back a planned commercial launch to mid-2022, with the Alstom electrification deal expected to reach financial close in mid-2019.

The line is being built by the China Civil Engineering Construction Corporation (CCECC), a major contractor in Nigeria active in multiple transport segments, under a $1.2bn agreement signed with the state government. The blue line will carry 400,000 passengers per day once commercial operations begin, with ridership forecast to expand to 700,000 daily once it is fully completed.

Rail development in the country took another big step forward in July 2018 when Nigeria officially inaugurated Abuja’s light rail network, 11 years after construction began. The first phase to come online runs between Abuja’s Nnamdi Azikiwe International Airport (NAIA) to other parts of the city, stretching 45.2 km of track on two lines. CCECC built the $823m section, with the government planning to extend Abuja’s light rail network to six lines spanning 292 km of track.

Earlier in the month, the federal government awarded a contract for the second phase of CCECC’s contract, with Chinese firms also set to provide rolling stock and human resources training.


Nigeria is home to 853 km of Atlantic Ocean coastline spanning seven southern states including Lagos, Ondo, Delta, Bayelsa, Rivers, Akwa Ibom and Cross River. Many ports in the country derive most of their activities and income from the oil and gas industry in the Niger Delta, with three of the country’s six largest ports located in this region.

These six ports by gross registered tonnage (GRT) in 2017 were Onne Port, located within the world’s largest oil and gas free zone on Ogu Creek’s Bonny River Estuary in the Niger Delta, Tin Can Island Port and Apapa Port, both located in Lagos State, Delta Port in Delta State, Rivers Port in Port Harcourt’s River State, and Calabar Port in Cross River State.

Offering easy access to major West African oilfields home to most of the country’s petroleum production, Onne Port was the first of its kind to be operated under a PPP framework in Nigeria using a landlord model developed to encourage more private sector investment in Nigerian transport. As highlighted by a March 2017 Deloitte report, Nigerian ports were facing major challenges up until 2006, with the average ship waiting time before berthing standing at 21 days, vessel turnaround time at five days, and dwell time for cargo at over 30 days in many cases. Deloitte reports that Nigerian ports were characterised by poor infrastructure and heavy congestion, leading to insecurity, delays in cargo clearance and inefficiencies in cargo handling, and substantial losses. In response to these challenges, the federal government moved to invite 25 private operators to act as landlords at its port network in 2006, under 25-year concessions.

PPP Benefits

Deloitte reports that terminal operators have since made a combined N200bn ($646.6m) of investment in new port infrastructure in just 10 years, easily exceeding the government’s projected N50bn ($161.7m) increase over 25 years. Major outlays included rubber-tyred gantry cranes, mobile harbour cranes, trucks, buildings, quays, inland container depots, terminal lighting, automated tracking systems, generators, plants and machinery.

According to the firm, this boosted traffic and throughput substantially: container throughput, for example, rose from 400,000 twenty-foot equivalent units (TEUs) in 2006, to 1.6m TEUs in 2014. The average vessel turnaround time was also reduced from five days to 41 hours, while average dwell time for cargo clearance fell from 30 days to 14.

Onne Port is a good example of the benefits afforded by private sector participation in transport development. Spanning 2538 ha, Onne Port facilities include onshore and offshore oil logistics service centres, as well as general cargo, dry and wet bulk cargo, and oil well equipment facilities, containerised cargo and other logistics services. The port is modern and industrialised, offering logistics equipment including one of the largest mobile harbour cranes with a 208-tonne lifting capacity, and grove twin cranes with a lifting capacity of 300 tonnes of single heavy cargo.

Sea Shipping Trends

As with many other segments of the Nigerian economy, ports and shipping activity has risen and fallen in tandem with the country’s oil economy. NBS data shows that the total number of ocean vessels making call at Nigerian ports rose from 4837 in 2012 to hit a high of 5369 in 2013, moderating to 5333 in 2014 and 5014 in 2015, with activity dropping off as global oil prices collapsed from around $115 per barrel of Brent crude in June 2014, to less than $30 per barrel in early 2016. The total number of vessels making call at Nigerian ports fell to 4622 in 2016, sinking to a five-year low of 4175 in 2017, according to NBS data.

Cargo volumes have also been slipping in recent years, with NBS reporting that combined ocean vessel GRT at Nigeria’s top six ports rose from 120.82m tonnes in 2012 to 130.63m tonnes in 2013, peaking at 148.32m tonnes in 2014, then moderating to 141.25m tonnes, 134.21m tonnes, and 131.57m tonnes in 2015, 2016, and 2017, respectively.

The Onne deep seaport is Nigeria’s busiest, although traffic and cargo volumes have been slipping since 2012. The total number of ocean vessels making call there fell from 859 in 2012 to 836 in 2014, 659 in 2016, and 681 in 2017, while GRT fell from 42.91m tonnes in 2012 to hit 45.54m tonnes in 2014 and 40.09m tonnes in 2016, before recovering to 42.82m tonnes in 2017.

Tin Can Island Port saw ocean vessels and GRT rise from 1508 ships carrying 32.64m tonnes in 2012 to hit 1692 vessels carrying 47.23m tonnes in 2014, although these figures slipped to 1559 vessels and 45.23m tonnes in 2016, and 1350 vessels carrying 41.48m in 2017.

Apapa Port recorded 1445 vessels carrying 32.07m tonnes in 2012, with traffic rising to hit 1510 vessels and 34.19 tonnes in 2013, and 1410 vessels carrying 36.29m tonnes in 2015, before sliding to 1194 vessels carrying 31.93m tonnes in 2017.

Recovery & Expansion

Oil prices have recovered from their 2016 lows, with Brent crude prices hovering around the $80 per barrel mark as of late October 2018, and there were early indicators that this has benefitted Nigerian maritime shipping.

With economic recovery under way, and demand for containers in Nigeria forecast to rise by 12.9% annually until 2025, creating a shortfall of up to 5.5m TEUs in Lagos alone over the same period, Nigeria is also moving to bolster maritime shipping capacity with the construction of the new Lekki deep seaport.

In March 2018 the Nigerian government announced it had officially launched construction of the Lekki deepsea port, which will be located in the heart of the Lagos Free Trade Zone. The project will comprise three container berths, one dry bulk berth and three liquid berths, offering 2.7m TEUs of annual handling capacity upon completion. According to media reports, port developers are planning to dredge the port channel to create a 16-metre draught, enabling it to handle larger vessels, with the $1.5bn project expected to be completed in 2020, creating one of the region’s largest seaports, and helping Nigeria stave off rising competition for ship traffic from its neighbours.


According to the NCAA, Nigeria is home to 20 airports, 23 active domestic airlines, 554 licensed pilots, 913 licensed engineers, and 1700 cabin personnel. It is served by 22 foreign carriers, including three – RwandAir, Delta Air Lines, and Emirates – that have recently expanded services, according to a June 2018 report by George Etomi & Partners, a Lagos-based law firm. There are direct services to London, Paris, Frankfurt, New York, Johannesburg, Atlanta, Amsterdam, Dubai and Jeddah. Two of its largest airports are MMIA in Lagos, and NAIA in Abuja; the former accounts for over 60% of total passenger and aircraft movements, according to the NCAA. Calabar, Kano and Port Harcourt are also home to international airports.

The NBS reports that the total number of passengers travelling through Nigerian airports dropped by 8.03% in 2017 to hit 13.39m, including 6.69m arrivals and 6.7m departures. The decline was attributed to runway refurbishments at NAIA which shut the airport down for six weeks beginning in March 2017, re-routing through the Kaduna airport – with domestic passengers transiting NAIA in Abuja rising from 577,386 in the second quarter of 2017, to hit 841,401 in the third quarter of 2017. The total number of domestic and international passengers, meanwhile, fell by 8.4% and 7.13% y-o-y, respectively, with Lagos, Abuja, Port Harcourt, Owerri and Kano the busiest airports through the year, according to NBS.

Although annual passenger volumes were down, air passenger traffic resumed a growth trajectory in the fourth quarter of 2017, with the NBS reporting that the total number of air passengers in the country rose by 4.89% y-o-y in the fourth quarter to hit 3.66m, against 3.49m in the fourth quarter of 2016. Recovery continued into 2018, and a June 2018 report by the George Etomi & Partners law firm found that the air transport and storage sector grew by 10.22% in the first quarter of 2018, against 4.71% in the fourth quarter of 2017 and 0.48% in the third quarter of 2017.

Airport Projects

The investment in new airport infrastructure will be an important consideration for transport stakeholders within the country, with the International Air Transport Association reporting in November 2017 that the country’s air traffic is forecast to hit 31m annual passengers by 2030, when the population is expected to be 263m. In keeping with broader continental trends, 2030 should see total air traffic in the African continent rise to hit 400m passengers.

The ERGP’s transport infrastructure programme emphasises aviation development, calling on the government to establish fast-track completion of new airport cargo and passenger handling terminals to boost total annual capacity from 208,424 tonnes of cargo and 15m passengers, to hit 276,848 tonnes and 45m air passengers by 2020.

The government is currently undertaking several major airport projects to meet its ERGP targets, including building new airport terminals at NAIA, Kano, Enugu and Port Harcourt, as well as a planned new airport in Lekki, Lagos. China’s CCECC will construct the four new terminals under a N153bn ($494.6m) agreement signed with the federal government in July 2014.


Although the process of selecting a preferred bidder for the proposed $450m modular airport collapsed in 2014, local media reported in October 2017 that the state government had re-launched discussions to build the new airport under a design, build, finance, operate and manage PPP framework.

The planned airport would cater to wide-body, double-deck aircraft with four engines, including the Airbus A380, with capacity to handle 2m passengers annually in its early phases. It is expected to be built on a 3000-ha plot located near the Lekki-Epe corridor, 10 km from the Lekki Free Trade Zone, in an effort to boost cargo transport activities and multi-modal connectivity. Speaking to local media in October 2017, Chibuike Rotimi Ogunleye, the-then state commissioner for commerce and industry, said the state government had restarted the process of selecting airport investors.

Work is also progressing on a new N61.2bn (197.9m) terminal at Abuja’s NAIA, which is being financed with a $500m loan from the Export-Import Bank of China, as well as $100m worth of government funding, and although the project has been repeatedly delayed by challenges in accessing local electricity and water supply, it appears to be nearing completion.

In July 2018 Saleh Dunoma, managing director of the FAAN, told local media that NAIA’s new terminal – aided by the contracting work of CCECC and the establishment of an independent power supply for the airport – is set to begin operations by the end of October 2018.

The terminal is set to become part of a major multi-modal hub, as it will link to NAIA’s two existing terminals, which will then connect to the city’s light rail system. The new terminal is also set to accommodate more traffic with the construction of a second runway.


Although rising passenger and cargo demand continues to strain nearly every segment of Nigeria’s transport sector, the country has made commendable progress over the course of 2017 and 2018 in alleviating urban congestion, investing in critical infrastructure projects and increasing private sector participation in the development of transport arteries. The opening of the Abuja Light Rail system, steady progress on the new terminal at Abuja’s NAIA, and rising public and private investment in the critical rail and road segments should see the transport sector become a key enabler of diversified non-oil growth, supporting ERGP targets as well as an ongoing macroeconomic recovery.


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The Report: Nigeria 2019

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