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As Poor Transportation System Blunts Nigeria’s Marketing Edge

09 Apr 2013

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Olusegun Aganga, Trade and Investment Minister

Crusoe Osagie calls on government and other stakeholders to help preserve the economic edge provided by Nigeria’s large population and market, through the development of a functional and diversified transportation system

Vibrant markets are the essential drivers of all prosperous economies and manufacturing is only as relevant as it is able to meet the needs of consumers within a specified economic space or any given population, experts have said.

So, when a production chart is being plotted, before factors of production such as land, labour, capital, time and entrepreneurship are computed. But, one essential component must first be considered and without any dispute, that element is market.

Put simply, a market is one of many varieties of systems, institutions, procedures, social relations and infrastructure whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services (including labour) in exchange for money from buyers. It can be said that a market is the process by which the prices of goods and services are established.

Viewed from any academic perspective, most analysts agree that a market in one form or another is the key to the survival of all business endeavours. As a matter of fact, one strategic selling point, which the marketers of the Nigerian economy and others who argue for the flow of foreign investment into the country capitalise on, is the existence of a potent and dynamic market.
However, important as the market factor may be in the economic life of any nation, it is useless if it cannot be accessed, a point where analyst say the Nigerian government and economic handlers must intervene to make the nation’s 160 million population and the  resulting market advantage actually count.

Of what use is a market when it cannot be accessed, many have argued. A farmer, Osaigbovo Amadin, has excess mangoes ready for market in the suburban community of Iguobazuwa in Edo State and there is a fruit juice concentrate manufacturing company somewhere in Benue State where the mango farmer will earn reasonable income for the sale of his produce.
Yet this farmer still has to face huge annual losses due to post harvest spoilage. The reason for this failure is obvious: inability of smallholders to move their products seamlessly and cost effectively from farm or factory to market.

A trip by road from Benin through Ondo and Ogun to Lagos on a normal day paints the terrible picture of the transportation crisis, which Nigeria currently faces.

THISDAY, in a recent survey to assess the difficulty of accessing the markets in the South-western parts of the country from the South-eastern region through the Benin-Lagos road, discovered the tortuous experiences, which manufacturers and distributors undertake in attempts to take advantage of the more developed and better paying markets. These attempts, for many, end in despair.

Their trucks break down; their vehicles are attacked by robbers; the weather takes its toll on their sensitive products as a result of lengthy delays by police and other agents of state, as well as traffic jams or many times they pay the ultimate price. Tossed into the bush, somersaults into the rivers along the way or they are involved in head on collisions leaving the conveyers dead and products destroyed.

The THISDAY survey revealed that taking off from Benin by 6.00am and heading at moderate speed towards Lagos, one counts not less than 1,000 trucks either heading towards Lagos or returning towards Benin, bearing goods or going to carry products ranging from industrial goods to food item, petroleum products, building materials and varied other items. These over 1,000 trucks were counted on this crater-dotted road, in the survey carried out between the hours of 6.00 am and 10.00am.

Of all these over 1,103  trucks counted in the survey not less than 20 experience one form of incident or another with a couple of these incidents ending up extremely ghastly or fatal.

A truck driver, Johnson Ibiyemi, whose journey was punctuated by a broken axle, told THISDAY that it could take him up to 24 hours to get his vehicle in order and to continue his journey to Asaba, Delta state, to deliver the furniture items he was carrying.

“This happens all the time,” he said, “I even thank God that this is not a very serious issue. The mechanic has rushed to Ore to see if he can get the part. If he cannot get it in Ore he will go to Benin and he will surely get it there. If he can come back this evening, then we will set out again tomorrow,” he explained.

This is how difficult it can be in Nigeria to connect products with market. The findings of this survey are similar to what happens in all the various roads across the country, from North to south, east to west the story is the same. Statistics show that Nigeria moves 80 per cent of its goods and services to and from the market on the road.

Rail Transportation in Nigeria
Railways in Nigeria are operated by the Nigerian Railway Corporation (NRC). As of 2003, Nigeria’s poorly maintained rail system had 3,557 kilometres of 1,067 mm (3 ft 6 in) narrow gauge track.

The country has two major rail lines: one connects Lagos on the Bight of Benin and Nguru in the Northern state of Yobe; the other connects Port Harcourt in the Niger Delta and Maiduguri in the northeastern state of Borno.

In order to remedy the poor condition, efficiency, and profitability of the nation’s railroads, the government is seeking to privatise the NRC. Under the privatisation plan, three separate concessions of 25–30 years would be granted to private-sector companies to run railroads in the western, central, and eastern regions.

The inefficiency of the rail system in Nigeria is signified by the preponderance of the narrow gauge, up to 3,557 kilometres and standard gauge of only 329 kilometres, which is 1,435mm.

According to reports, years of neglect of both the rolling stock and the right-of-way have seriously reduced the capacity and utility of the system. A project to restore Nigeria's railways has been underway since 2009.

A project to convert the gauge of the system to 1,435 mm (4 ft 8 1⁄2 in) has also somewhat stalled. Couplings of the chopper kind, vacuum brakes and non-roller bearing plain axles are also obsolete. There are no railway links with adjacent countries. There were plans to establish rail links to Niger and Cameroon, but these have not yet been built.

On December 21, 2012, the Nigerian government inaugurated the NRC Lagos-Kano intercity passenger train services and haulage of petroleum products. The revitalised Lagos-Kano intercity train services will complement the existing Lagos- Ilorin and Minna-Kano intercity train services.

The Managing Director of the NRC, Mr. Adeseyi Sijuwade, said that Lagos-Kano Route covered a stretch of 1,126 kilometres. “Today, we celebrate a successful completion of track and signaling rehabilitation of the Western Rail Line and the re-commencement of passenger and freight rail services on the Lagos-Kano corridor,” he said.

Even with these efforts, the nation is still light years from having an ideal rail transportation system with the capacity to help ameliorate the intense pressure on the roads and reduce the wanton loss of life and property in the process. The water ways are almost entirely neglected with no visible efforts being made to take advantage of this medium of transportation.

Analysts warn that the endless touting of the advantage of a 160-million strong consumer market, mostly made up of youth population, will only become a marketing edge if the various parts of the country in which these people live and work are effectively linked with efficient transportation systems.

The road, the rail, water and air transportation systems must all be activated; otherwise all we have is a large country with a large number of people locked into pockets of geographical locations, which cannot be reached with goods and services of economic value.

Tags: Business, Nigeria, Featured, Transportation System

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