A Multivariate Analysis of the Transportation Sector and Economic Growth in Nigeria
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Abstract
It is widely acknowledged that an efficient transportation sector promotes economic growth in a country. This study empirically examines the relationship between the transportation sector and economic growth in Nigeria. Focussing on the road, air, water and rail/pipeline transport subsectors and employing Eagle-Granger Co-integration and Error Correction Model (ECM) on time series data from 1981 to 2020; the results show that in the long run, road and air transport sub-sectors positively and significantly impact Gross Domestic Product in Nigeria while water and rail/pipeline transport sub-sectors have a negative but significant impact on growth. Although the water and rail/pipeline transport sectors do not meet apriori expectations, the results are consistent with earlier studies done in Nigeria. Furthermore, the findings show that the road transport sector has the greatest impact on Gross Domestic Product. To maximize the potential of the transportation sector, the paper suggests that the government should address the challenges in the road and air sectors and revamp the water and rail sectors for better productivity.
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