(Ecofin Agency) - In Nigeria, the Federal Government has commenced a $41 billion railway expansion project which aims to improve movement of goods across the country.

The new project involves the construction of a 1,100-kilometer railway line to connect the nation’s two biggest cities, Lagos, and Kano and another coastal railway that will connect Lagos to the eastern city of Calabar. The two new railways are expected to cost $20 billion. Most of the funding is expected to come from China’s Exim Bank, but so far, the bank has only released $5.9 billion.

The Minister of Transportation, Rotimi Amaechi (photo), in an interview last week, said the project is being carried out by China’s Civil Engineering and Construction Co. (CCECC) and both railways should be ready by the end of 2019.

Aside the two railways, another $16 billion should be invested in additional rail routes that will link up all the country’s state capitals and even extend to Niger’s southern city of Maradi. Talks, however, are still ongoing with investors in this regard. According to the minister, the government will also try to complete a $3 billion line from Abuja to the southern oil hub of Warri by 2018.

Meanwhile, a group led by General Electric Co. is investing $2.2 billion in renovating the country’s 3,505km old narrow-gauge railway lines linking Port Harcourt and Lagos with the north. The group which includes, SinoHydro of China, South Africa’s Transnet SOC Ltd and Netherlands’ APM Terminals BV will fund, revamp and operate the railways for a period to be decided with the government.

To revive its economy which has been struggling over the past two years, Nigeria has decided to turn its focus from oil to other key sectors such as infrastructure. In fact, the expansion of its railway network falls in this framework. “There’s no economic development or growth without logistics, and for logistics to be efficient, you have to deal with the issue of railways,” Amaechi explained.

Anita Fatunji