Nigeria Moves to Reform Road Transport Sector, Targets Higher GDP Contribution

The federal government has begun moves to reform Nigeria’s road transport sector, with stakeholders identifying low productivity, weak regulation, ageing vehicles and fragmented governance as challenges limiting the sector’s contribution to the economy.

The development followed a high-level stakeholder meeting convened by the Office of the Vice President in Abuja on Monday to launch the Initiative on Road Transport Transformation.

The meeting brought together representatives of federal ministries, regulatory agencies, transport unions, financial institutions and development partners to consider a framework for formalising and modernising the sector.

Road transport accounts for more than 90 per cent of passenger and freight movement in Nigeria, while the transport and storage sector contributes about 1.56 per cent to the country’s Gross Domestic Product (GDP).

Officials at the meeting described the disparity as a challenge to economic growth and called for reforms capable of improving the efficiency and productivity of road transportation.

Special Adviser to the President on Economic Affairs, Dr Tope Fasua, who represented Vice President Kashim Shettima, outlined five priority areas for the proposed transformation.

They include improving road safety and professional driver development, deploying digital systems for vehicles, drivers and transport infrastructure, modernising the national road network, strengthening private-sector participation and improving coordination among the federal, state and local governments.

Fasua said the administration intended to address the sector’s challenges through infrastructure development, regulatory reforms, digital technology and cleaner energy solutions.

Technical Adviser on Transportation, Logistics and Innovation, Prince Segun Obayendo, said Nigeria had lagged behind several developed countries in formalising and structuring its road transport industry.

He cited Germany, France and the United Kingdom, which he said began formalising their transport sectors in the 1930s, and argued that Nigeria needed to accelerate reforms in the sector.

Obayendo said the National Road Safety Advisory Council, chaired by the Vice President, would provide oversight for the initiative without the creation of a new government agency.

He said existing personnel at the state and local government levels would serve as desk officers to support implementation.

Financing for fleet renewal also featured prominently in the discussions, with Obayendo calling for single-digit interest rates for commercial transport operators.

He said prevailing commercial lending rates of between 30 and 33 per cent made it difficult for operators to replace ageing vehicles, with implications for road safety and service quality.

He also called for improvements in driver licensing and data management, as well as wider adoption of compressed natural gas as part of efforts to reduce transport costs and modernise the sector.

The stakeholders proposed the establishment of a multi-sector technical committee to develop an integrated governance framework for the initiative.

The committee is expected to examine the regulatory, financial, technological and institutional requirements for implementing the proposed reforms.

According to the Vice President, the success of the initiative would ultimately be measured by its impact on road safety, system efficiency, the welfare and dignity of transport workers and the broader economy.

The initiative is awaiting formal endorsement, after which the proposed technical committee is expected to submit its recommendations on the implementation framework.