China Approves $254.76m Loan For Nigeria’s Railway

The China Development Bank (CDB) has approved a $254.76 million (€245 million) loan to fund Nigeria’s Kano-Kaduna railway project. Announced on Tuesday, the financing aims to ensure steady progress on the 203-kilometer standard-gauge railway, a key infrastructure project connecting Kano, a major commercial hub in northern Nigeria, to Abuja, the nation’s capital.
According to the CDB, the loan will provide critical support to prevent delays in construction and ensure the project meets its completion targets. Once operational, the railway is expected to offer residents a safe and efficient transportation option while boosting regional connectivity.
Economic benefits are also anticipated, with the project set to create jobs during both construction and operation. Additionally, the railway is projected to stimulate the growth of related industries along its route, contributing to broader economic development in the region.
The project, executed by the China Civil Engineering Construction Corporation (CCECC), is a significant initiative under the Belt and Road Forum for International Cooperation. The CDB has reaffirmed its commitment to working closely with Nigerian partners to ensure timely disbursement of funds and smooth management of the project’s subsequent phases.
Federal authorities have prioritised railway development under an Engineering, Procurement, Construction, and Financing (EPC+F) model, which requires Nigeria to provide 15 per cent of the funding while securing the remaining 85 per cent through loans. Despite challenges in securing financing due to perceived risks, China’s involvement has been pivotal.
President Bola Tinubu has assured Nigerians that the Ibadan-Abuja-Kaduna-Kano railway corridor will be completed, enhancing regional connectivity and meeting the transportation needs of West Africa. The Kaduna-Kano section is expected to be operational by the end of this year.
In related developments, plans are underway to construct a speed rail line between Abuja and Lagos. Two organisations have expressed interest in the project, which will be executed under a Public-Private Partnership (PPP) agreement, pending regulatory approval.
Nigeria’s debt servicing costs are projected to double, rising from N8 trillion in 2024 to N16 trillion in 2025, a development described as a “red flag” by Tileriwa Adebayo, CEO of CFG Advisory. Speaking on Arise Television, Adebayo highlighted concerns that debt servicing now surpasses the combined budget allocations for defence, security, infrastructure, health, and education.
“The fiscal regime under President Bola Tinubu is facing significant challenges. Debt servicing costs are now higher than critical national spending, which is unsustainable,” Adebayo said.
He recommended asset sales as a strategy to ease the debt burden and improve Nigeria’s credit rating, warning that failure to address the rising costs could push the country deeper into fiscal instability.
President Tinubu recently presented the 2025 “Budget of Restoration” to the National Assembly, outlining a record N49.70 trillion spending plan. However, the budget includes a substantial deficit of N13.39 trillion, to be financed through borrowing.
Experts have expressed concern over the growing reliance on debt, emphasising the need for fiscal reforms to stabilise the economy and ensure sustainable development.