Nigeria: The Unplanned Economy (Part 28)

By Ikenga Chronicles January 24, 2018

Nigeria: The Unplanned Economy (Part 28)

 — Baron Roy

The Comedy of the Railways (ii)

The story of the India Railways is astounding. All of the 119,000km of tracks compared to the 3,305km of tracks in Nigeria, cut across all major towns and cities in India.

With a workforce of almost 1.5 million directly employed by the railways, it could be imagined that the whole of Kebbi State is employed by the India Railways!

The impact of the railways in India is gargantuan! Hitherto remote areas are connected to economic centres by the railways. Goods generated in the rural areas get effectively freighted to the commercial centres, who get more economic prices for the goods.

Rural-Urban migration in India came to a screeching halt with the railway network. The per capita income of the country side increased drastically to be at par, and even exceed that of the commercial centres. With the railways alone, hundreds of millions were lifted out of poverty! India has a population of a billion souls, and less than 100 million persons are termed as living below the poverty line!

How do the railways help lift the rural areas out of poverty?

Agricultural products are shipped by rail from the communal and commercial farms in India to the commercial centres. India is the largest producer of cotton, mostly from small scale rural farms. This is moved toto the big firms in Mumbai, Delhi, etc . The big firms require the cotton in “yarned” bales so they helped to set up cottage industries in the rural areas. Cotton ginneries sprouted all over the rural areas (raw cotton is yarned in the ginnery, from the raw fluffy forms to the raw threadlike form). In the ginnery, cottonseed oil is extracted and barrelled, alongside the cotton bales, and easily transported to the commercial centres via rails.

Aside cotton, coffee, vegetables, fruits, grains, livestock and others get shipped to the commercial centres. Associated cottage industries to process these products are all over the rural areas. Rural employment was reduced by over 70% as a result of the value chain between the railways and other sectors. Rural income increased by over 300%. Tax income from the rural areas also spiked. Development of the rural areas has been accelerated as a result. Due to the Railways, people actually migrated from the cities to the country side in India! May I inform us here that several manufacturing concerns deliberately moved their operations to the countryside simply because of the railway network.

If the direct impact of the India Railways is astounding, then the impact on engineering manufacturing is better imagined. The Engineering Manufacturing sector in India actually was spurred by the Railways. Several firms are involved in the direct supply of locomotives, carriages, rolling stocks, braking systems, signal lights, tracks, and many others to the India Railways. They deliberately design and manufacture these items/parts in India; they do not import from Japan or Germany but manufacture themselves. These manufacturers require forged steel and others from the steel makers. With this, Reliance and Accelor Mittal became global brands in steel manufacturing. They expanded so much and expanded beyond the shores of India. They became so successful that they have taken over British Steel Manufacturing! And their combined power employs over a million more people. India has over 5 million employed people by the railways and service companies via value chain!

But to manufacture steel, coal is required in large quantities. As a result, coal mines have sprouted all over India. The coal companies supply the steelmakers, and employ hundreds of thousands across the country. Employment rises, incomes rise, tax income of the different governmental tiers spike, the GDP rises, and economic development is on the rise.

If India builds railway equipment and steel companies, building consumer vehicles would be a given. And several firms led by TATA do build vehicles. The India Vehicle Manufacturing sector is a direct offshoot of the railways! India has gone beyond just building railways, they now manufacture missiles, space satellites, re-entry vehicles, and other military equipment.

The federal government in India doesn’t control anything; the regions and the municipalities do. All the federal does is to coordinate activities. There is no federal disturbance of progress. They do not pay lip-service to their national needs. They do not pay lip service to employment and economic growth. They do not make any attempt at sectional dominance of any group–they’re not stupid.

The foolishness of Nigeria is made more glaring in the success of India. With a single policy, they turned around their country! Is it not instructive that a country with a billion people have less poor people than Nigeria?

Boko Haram and other atrocities thrive in Nigeria due to the fact that more than 85% of Nigerians are in the countryside. There is very little plan to bring development to the rural areas. Aside coastal Nigeria and some clusters in the hinterlands, the majority lay in the countryside. Apart from those at the coastal South West up to Ibadan, and those around the Warri to Calabar coast up till Enugu, the rest of the country is rural save a few state capitals. From Benue to just south of Maiduguri is very rural. Benin City is arguably the only urban centre in Edo State. No part of Kogi could be termed urban. Minna is a bit urban. Kebbi, Sokoto, Yobe and Katsina are rural. In fact, the largest urban state in Nigeria is Delta State (6 huge cities). Lagos State is one huge city! Aside Delta State, there is no Nigerian State with up to 3 cities with a population of 500,000 people. Of course with self governance and regionalism, the rural areas would experience very rapid development, and poverty would recede–most of our rural dwellers are very poor.

The railways could reduce poverty, but the government must step away from it first. Again, the structure just has to change. The centralized system is the very reason for poverty in Nigeria! Centralization must be dismantled!

(To be continued)