https://businessday.ng/news/article/nrc-running-at-a-loss-borrowing-to-sustain-operations-says-md/
A most interesting report.
The NRC has indeed been running at a loss since 1964 so he is not telling us anything new. That’s 62 years of losses and that needs to sink in!!! The NRC is an insolvent business that has gone bankrupt twice in its history and continues to tempt that fate. It has been kept afloat solely by the grace of the federal government’s annual appropriation which though inadequate enables it to just keep its head above water. But take that away and it sinks immediately. The question is for how long can it continue to career from crisis to crisis while expecting manna to fall from heaven?
The statements attributed to the MD herein are also contradictory and lack strategic coherence. He’s making a loss but can find the resources to build a “befitting” Headquarters building or to invest in high speed rail between Lagos and Abuja? Where will the money come from? Doesn’t that sound like a hoax?
There is also nowhere in the report that a plan or strategy is articulated for the remediation of the acclaimed tragic loss making situation other than these plans to spend/waste more or make more losses.
The alleged borrowings to fund operations is even curiouser. On the back of what business plan is this based and at what discount rate? Nigerian banks typically lend at about 23% APR, and to do this to a business with a negative cash flow that has operating costs that may be over 400% of revenues and that is losing money hand over fist, would be irresponsible and can only be a death sentence.
What is further curious is the allusion to institutional reforms being carried out. It would be helpful if there was disclosure of the so called reforms and how they propose to stem the NRC’s current and long term problems.
The reality is that the only remediation that can stem the continuing decline and accelerating race to the bottom of a once glorious enterprise is that which it will not speak its name nor contemplate. Unbundling is the only way out of the cul de sac which the NRC finds itself. Yet it continues to resist. As our people say, it is the stubborn fly that follows the corpse into the grave.
The NRC also now has a major corporate governance problem. It currently has no governing board and no supervising minister. Its last board’s tenure lapsed in March 2023 while the Hon. Minister of Transportation Saidu Alkali resigned some weeks back. What exists and has done for some time now is alien to, and a parody of the Nigerian Railway Corporation Act. Much as we are renowned for obeying our laws in the breach, any third parties whether public or private, signing contracts with, or obtaining licences from the NRC need to be properly guided. As they say, buyer beware.
Let us pray