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Impact of Credit and Financial Services in Transport Management in Nigeria

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No. of pages: 132
No. of chapters: 5
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Introduction:
CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The administration of urban transportation in Nigeria follows the structure of government administration, that is, the three-tier form (Oni et al, 2006). This system manifested in the form of a serious expectation gap between citizens minimum expectations and the actual road construction delivery. In 1998, Nigeria needed N300bn to fix dilapidated roads and N54bn subsequently every year for maintenance and rehabilitation (National Policy on Transport, 2010). In spite of diagnosing the problem, the federal government failed to invest the required amount because of budget constraints and corruption in the execution of the road contract award process. The Federal Ministry of Works is the arm of the government that awards contracts on roads.

According to (Kalu,2014), ‘’The desire for transportation infrastructure repositioning compelled pioneer leaders to design developmental plans which allocated significant capital expenditure on transports infrastructure’’. But what one sees at the end, the money goes out of the government purse but the job is either not done at all or haphazardly done. This happens always because funding for projects is provided from the government purse as against having a contractor to construct the road and later recoup from toll collection later. National Transport Policy (2010) recognized this system of contract award but no federal road is presently tolled.

Public Private Partnerships are innovative financing models being used by advanced economies notably, Germany and America. It generally takes the form of a legal contract between the public and private entities which sets a framework specifying the roles, responsibilities, and financial contribution of each, but can also be cooperation without a binding contract (Broadus et al, 2013).

Lagos state government used the PPP method in Lagos Epe road for five years past and the toll is being collected from motorists to pay back the concessioner for money spent. Of all the states in Nigeria it’s widely believed that Lagos state is the best in transportation facilities ‘’it becomes imperative that state planners and policymakers must lend ample consideration to the means and modes of both human and material mobility (Akwara, 2014). It is of course when the roads are provided that the vehicle will be able to ply seamlessly without accident.

The Nigerian Transport Policy (2010) observed that the accident rate in Nigeria is 28 deaths every day of the year. Therefore a resident in Nigeria has a 47 times the chance of having a motor accident than of a British resident.

The Nigeria Railway has been in existence since 1898 and its existence was given legal backing through an act establishing the Nigeria Railway Corporation in 1955 (Akwara et al 2014). Akwara further explained that the result of the trend was the near-comatose state of the rail system finds itself in Nigeria. It will not be out of place to straightway say that the railway system had stopped serving its purpose for the past 30 years in spite of various government revival packages. (Akwara 2006) exclaimed that a catalyst that can catapult Nigeria's transport to where it rightly belongs in the development process of this country is improved funding in the railway and aviation subsectors.

National Transport Policy (2010) recognizes that railways can provide the most cost-effective, affordable, energy-saving, and environmentally friendly form of transport when traffic densities are high. The Nigerian experience is a very bitter one. Since 1955, there has been no visible addition to the rail tracks that simply run from South-west to North and from there run to the South-east. It is most unwise to journey from Lagos to Port Harcourt by rail when road transport is there. In general the railway has ceased to be economically viable in Nigeria for the past 30 years. The attempts by subsequent governments have not reinstated railways to their 1960 level.

In the maritime sector, the government is still proposing to create the enabling environment for indigenous private shipping companies to acquire a fleet of vessels so as to partake effectively in the booming shipping business that is presently over 60% dominated by foreign companies. National transport policy (2010) recognizes that though Nigeria has great potential for a buoyant marine industry the Nigerian ports system needs to operate efficiently. The problem here, therefore, is that adequate credit lines (domestic and foreign) will require government input even when the cabotage law is implemented. The NTP (2010) also recognizes that employers in the shipping industry must learn to imbibe the culture of financial discipline to enable them to meet up the requirements for credit lines needed to build up fleet capacity that will compete with foreign ships that are presently eating away good businesses In our territory that rightly belong to the local ship owners.

The story of Nigeria's air transportation started in 1908 with the first commercial flight in 1935. The Nigerian airline industry enjoyed rapid growth following the boom in 1970 (Amwe, 2013). The problem faced by Nigeria Airways was mismanagement and corruption to the extent that the company could not meet its financial obligations and had to close down. According to the Central Bank of Nigeria, 2006 Statistical Bulletin vol.16 domestic passengers dwindled from 1.3m in 1986 to a mere 70,000 in 2001. This may partly be due to high operational costs, accidents recorded, and haphazard organization of the services. According to Godday Odidi (2012), there were 38 accidents between 1969 and 2012 in Nigerian airspace, most of the time killing all the passengers on board.
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