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OPEC Edges Closer To Production Agreement

OPEC Edges Closer To Production Agreement

A successful OPEC agreement in…

Nigeria Announces $41 Billion Rail Upgrade

Oil

The Nigerian railroads are getting a facelift as part of the national plan to diversify away from an economy in which the oil industry dominates, according to the African country’s transport minister.

“The plan we have now will go to every nook and corner,” Transport Minister Rotimi Amaechi said in an interview in Abuja announcing the $41 billion expansion project, according to Fin24 news. “There’s no economic development or growth without logistics, and for logistics to be efficient, you have to deal with the issue of railways.”

An additional $16 billion has been earmarked for a special railway linking all of the nation’s state capitals, as well as Maradi, a city in southern Niger, the ministry said.

“The rail in Nigeria was neglected for too long,” Oke Maduegbuna, of the logistics consulting firm Pete, Moss & Sam, said. “There’s a new awareness among government officials of the economic benefits of a good rail network,” the Abuja-based expert told Fin24 over the phone.

Oil profits represent over 90 percent of Nigeria’s oil revenues, meaning the past three years of low oil prices have been especially detrimental to the nation’s economy.

Related: This $65 Billion Oil Opportunity Will Never Be Tapped

Another obstacle in 2016 had been the rise of militant groups in the Niger Delta, who demanded Abuja spread the boon of the nation’s oil wealth evenly across the country.

For most of 2017, the effect of said groups has been suppressed via a diplomatic campaign between President Muhammadu Buhari’s administration and local Niger Delta leaders. But recently, a band of militant groups in the Niger Delta demanded that Abuja stop working with the Pan Niger Delta Forum to find a lasting peace solution and announced a plan to restart its attacks on oil facilities to begin an official separation from Nigeria.

By Zainab Calcuttawala for Oilprice.com

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