Why general electric pulled out of nigerias railway concession arrangement

General Electric (GE) did not entirely pull out of Nigeria's railway concession arrangement, but rather, it sold its stake in the concession to a new company, Transnet International Holdings (TIH), in 2020.

Here's a brief background:

In 2017, GE signed a concession agreement with the Nigerian government to operate and maintain the country's rail network for 25 years. The agreement was part of the government's efforts to revamp the country's rail infrastructure and improve transportation services.

However, in 2020, GE announced that it was selling its 74% stake in the concession to TIH, a subsidiary of the South African state-owned transportation company, Transnet. The sale was reportedly worth around $100 million.

There are several reasons that may have contributed to GE's decision to sell its stake in the concession:

  1. Financial challenges: GE has been facing financial challenges in recent years, including a significant decline in its stock price and a need to reduce its debt. Selling its stake in the Nigerian railway concession may have been a way for the company to generate some much-needed cash.
  2. Regulatory issues: There were reports of regulatory issues and delays in the implementation of the concession agreement, which may have created uncertainty and made it difficult for GE to operate effectively in the market.
  3. Competition from other players: The Nigerian railway market has become increasingly competitive, with other companies, such as China Civil Engineering Construction Corporation (CCECC) and China Railway Construction Corporation (CRCC), also vying for contracts and concessions.
  4. Strategic focus: GE may have decided to focus on other areas of its business, such as its aviation and healthcare divisions, rather than continuing to invest in the Nigerian railway concession.

After the sale, TIH took over the operation and maintenance of Nigeria's rail network, with a mandate to improve services and increase efficiency. However, the company has faced its own set of challenges, including delays in the implementation of its plans and concerns about the quality of its services.