Impact of Covid-19 on the Transportation Sector in Nigeria

CHAPTER ONE

INTRODUCTION

Background Of The Study

From time immemorial, transportation services have been an absolute necessity for businesses and governments to operate successfully. Businesses rely on transport systems to fulfil purchase orders, likewise people who need to move from one place to another in a timely fashion. Consisting of several sectors, from airlines, to marine and logistics, the industry is ultimately the backbone of any economy. On the 27th of February 2020, Nigeria’s first Covid-19 case came into the country through the Murtala Muhammed International Airport. This is not surprising considering how the airport is a foremost transport hub in the country.Since that first case, the country has witnessed a surge in Covid-19 cases, two phases of lockdown in metropolitan areas like Lagos State, Ogun State and the Federal Capital Territory, Abuja which spanned five weeks. Railway services have also been suspended and major international airports in Kano, Enugu, Port-Harcourt, Abuja and Lagos were closed to international flights.

On the 4th of May 2020, the lockdown was eased on the condition that Nigerians adhere strictly to social distancing guidelines and mandatory use face-masks in public spaces. The ban on interstate travel placed by the Federal Government remained. The pandemic and lockdowns have disrupted the economy as a whole and strained the operations of every sector in the country and the transportation industry is sadly not left out. All modes of transport have experienced a drastic drop in patronage in the five weeks of lockdown and restriction on movement. The nation has witnessed a decline in road, rail and flight activities occasioning huge revenue plunge.

According to Biodun Otunola, the Managing Director and Chief Executive of Planet Project Limited, in his interview with THISDAY, Nigeria has over 80 million people utilizing public transport daily. He explained that if the impact of the lockdown is assessed on the average national fare of N150 per day, it amounts to a total of N3 trillion for the period of five weeks. He stressed that the public transport sector and supply chains linked to transportation have been the most affected by the pandemic and the lockdown.

For aviation, there is the nose dive of revenue and grounding of about 120 domestic aircraft nationwide. Nigeria’s Aviation Minister, Hadi Sirika, said the sector has been losing N21 Billion monthly since the outbreak of Covid-19. He attributed the huge loss to the lack of activities in the sector which solely depends on flight operations for revenue. Similarly, Bankole Bernard, the former President, National Associations of Nigerian Travel Agencies (NANTA) reports that in the first two months of the global lockdown, the Nigerian travel industry lost more than N180 billion and thousands of jobs. Even ride-hailing services have taken a hit. Bolt halted ride-hailing activities during the period of the lockdown and turned to deliveries while Uber suspended its operations entirely following the restriction order.

Although intrastate movement has been lifted by the government, interstate travel remains closed and there is no gain saying the loss both interstate and intrastate workers have incurred from the periods of lockdown and thanks to the continued ban on interstate travel. As a result, some transport companies have turned to staff retrenchment and pay cuts as a means of staying afloat during these times

STATEMENT OF PROBLEM

The transportation sector carries an important social and environmental loads which have been adversely affected by the outbreak of Covid19. The sector provides economic and social opportunities and benefits which result in positive multiplier effects such as better accessibility to markets, employment and additional investments. At the microeconomic level, transportation is linked to producers, consumers and distribution costs. As a resultant effect of the pandemic, the added value and employment effects of transportation even in the Ministry of Transportation will fall. For instance, transportation companies purchase parts of their inputs such as fuel, supplies and maintenance from local suppliers. The production of these inputs generates additional value added employment in the local economy. The suppliers in turn, purchase goods and services from other local firms. Similarly, households that receive income from employment in transportation activities spend their income on local goods. As a result of these successive rounds of re-spending in the framework of local purchases, the overall impact on the economy, which transportation is a part of, exceeds the initial round of output, income and employment. Unfortunately, the outbreak of Covid19 has forcefully put a stop to all these owing to the fact that transportation which is at the center, is on hold. hence this study is set to find out how much impact Covid 19 has on the transportation sector in Nigeria

Objective Of The Study

The primary objective of this study is to:

1. To investigate the effect of Covid-19 on transportation fare.

2. To determine the effect of Covid-19 on commuters patronage.

3. To investigate the effect of Covid-19 on commercial drivers income level.

Research Questions

1. What was the effect of Covid-19 on transportation fare?

2. What was the effect of Covid-19 on customer patronage?

3. What was the effect of Covid-19 on drivers income level?

Significance Of The Study

This study will be of significance to public and private sector policy makers as the navigate this precarious time a new path for individuals and Nigeria.

This study will also serve as a reference material to students and researchers who may want to carry out further research on this study

Scope Of Study

This study will focus on the impact Covid 19 has on the transportation sector in Nigeria. The resident of Lagos state will be use as a sample respondent for this study

Limitations Of The Study

Finance was a challenge during the course of this study, availability of materials and time constraint were also major challenges encountered while carrying out this study

Definition Of Terms

Covid-19: Corona virus disease 2019(COVID-19) is defined as an illness caused by a novel corona virus called severe acute respiratory syndrome corona virus 2 (SARS-CoV-2

Transportation Sector: The transportation sector is a category of companies that provides services to move people and goods,as well as transportation infrastructure. The transportation sector consists of several industries including air freight and logistics,airline,marine,road and rail and transportation infrastructure.