THE ECONOMIC IMPACT OF RAILWAY REVITALIZING IN NIGERIA

ABSTRACT

The study examined the economic impact of railway revitalization in Nigeria using a time series data from the period 1989 to 1998 and 2004 to 2013 with E-view regression modeling approach. The results show that there is a long run relationship among the variables. In addition, the regression models show that the aprior expectation is correctly signed and significant while there is inverse relationship between rail transport and economic growth in Nigeria. This explains the decadence in the sector due to the neglect of the sector the various government in the past. The study therefore concludes that government should embark on developmental policies that will aim at strengthening the sub-sector of the economy like the Nigerian railway so that it can operate in its full capacity and neutralize the decadence that is evident in the sector. Base on the literature of the rail models, the study specifically recommend that railway revitalization has a multiplier effect to our national economy through wealth and employment creation, opening-up the economy and reduction in cost of transportation of goods and services.

 

 

CHAPTER ONE

INTRODUCTION

 1.0      BACKGROUNG TO THE STUDY                       

For the past century, transportation has fuelled the world’s economy. In recent decades, road and air have dominated many nation’s transportation investments to the detriment of the most sustainable solution to mass transit – rail. For the planets’ economic and environmental health, it is time to restore the balance between road, air and rail. The rail transportation is one means that moves both people, freight as well as contributes significantly to revenue earning. This modes of transportation has remained comatose in recent years apparently as a result of government’s lack of planning. This is more pronounced as other countries are fast moving or have moved away from the colonial coaches which was principally designed to service the colonial transport needs of moving goods from hinterland to the ports for shipment to Europe. Unfortunately, Nigeria has stuck to old system without a consideration for redesigning a rail system that will serve its economic purpose there leaving a large chunk of the nation’s routes which have witnessed increase movement of goods and services undeveloped, thus forcing commuters to rely on entirely road transport system not until recently, the current government had resorted to revamp the Rail sector.

However, Railway transport in Nigeria is inefficient and has hardly developed at all over the past decade compared to railways in the developed world. This is as a result of bad administration successive governments and to the lack of a functional and continuous transport policy for ensuring a constant pattern of rail development. By comparism, governments, in developing countries like Nigeria are still struggling with the concepts of government as the sole railway operator and one supplying all rail infrastructure and services until recently with the bid to revitalize the sector, the current government had decided to allow private firms to come in and play an active role in developing the industries for efficient performance.

Also, railway system plays a significant role in the development and overall growth of any economy. It is often regarded as the wheels of economic activity because of the crucial role it plays in providing the bulwark upon which production and distribution stand. It opens up regions, hinterlands and rural areas facilitating agricultural development as well as the growth of cottage and large scale industries. It also attracts residential, commercial, educational and recreational settlements and developments around its corridor. Due to the role it performs in growth and development process, rail transport is seen as the mainframe around which an integrated national transport system is built. Its capacity, which is further accentuated its safety and security factors, coupled with its ability to travel longer distance with ease and lower unit costs, places it in good stead to serve as the hub of a transport system of a nation (Nwanze, 2002). Rail transport has made varying degrees of impact on the development of the countries where they exist (Kolars and Malin,1970). Rowstow (1960) described rail transport as historically the most powerful single initiators of economic take off, being a main force in the widening of markets and a prerequisite to expanding the export sector. Hilling (1996) also observed that rail transport provides the first alternative to human porterage and brought with them some economic advantage. Early rail lines were critical to the development of commerce, the expansion of commercial agriculture and the stimulation of settlement expansion. The rail lines became the zone of economic activity, and the rail heads were the focal points for the expansion of settlements and economic input and output (O’Connor, 1965).

The study is divided into five chapters, chapter one deals on the background of the study, chapter two deals on the literature review, chapter three deals on the methodology, chapter four deals on estimation and discussion of results while five deals with the conclusion and recommendation.

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