Rowland Adewunmi: Transportation – The Road To Nowhere

Macroeconomic indices have shown that for many growing economies, the value added by transport to the economy accounts for 3 to 8 percent of GDP while employment in transport sector ranges between 2.5 and 11.5 percent of total paid employment. For a struggling economy like Nigeria, intensified investment in transport will not only create millions of jobs, but also stimulate critical sectors of the economy, facilitate the safe and efficient movement of people and goods, promote economic development, competitiveness and even strengthen security – on which the federal government alone plans to spend, and waste about 3 billion naira every day, including weekends in 2012.

Reflecting on the histories of successful nations, economic growth, prosperity and opportunity for everyone have followed investments in transport infrastructure. Investing in the sector is the basic foundation for governance and economic growth. A key example is the US where between 1980 and 1991, almost one-fifth of the increase in productivity in their economy was attributable to investment in roads – interstate highways and municipal link roads.

Efficient highways, rail systems, airlines, airports, harbors, and waterways will not only provide the backbone to grow our economy by moving people and goods around seamlessly, cheaply and safely, it can also employ millions of workers to generate substantial share of economic output the country. If well exploited, transportation can actually contribute in excess of 10 per cent of our total domestic product annually compared to the current levels of informality and low contribution. In addition, an effective transportation system can have direct and significant effect on the daily lives of our people. Properly targeted and managed investments in transport facilities will mean effective travel that could save time, fuel and reduce pollution; lives will be saved and fewer delays and less hassle for the average Nigerian.

Over the years, as Nigeria’s population grew, demand for freight and passenger transport, particularly by road and air have also grown to about 2 times faster than the GDP while the transport infrastructure and system remain the same, or actually declined. Hence, logistic costs for our goods and services are now typically more than 20 percent of sales from the global average of 2 percent, of which in Nigeria, transport costs alone can be as much as 15 percent.

It is imperative that Nigeria starts the process to opening up more of its roads (by making them usable), railways, and air and sea ports so we can mitigate the recurrent transportation crises that the country faces as well as ways of eliminating the present stagnation in economic activities to create opportunities for a true market driven economic growth by reduced cost of transportation and high quality services across the country. As the data below indicates, Nigeria’s transport densities and effective network access levels are much lower than that of comparable developing countries, this is unacceptable, implying an urgent need for large transport infrastructure investments.

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