Economic Contribution of Transportation Modes to the Growth of the Industrial Sector in Nigeria: 1986-2023

The industrial sector is widely recognized as a crucial driver of economic growth, a key solution to chronic unemployment, and an effective mechanism for wealth creation. However, the current state of Nigeria's industrial sector falls short of these expectations. Available statistics indicate that the industrial sector's contribution to Nigeria's Gross Domestic Product (GDP) has been on a downward trend, and the Manufacturers Association of Nigeria (MAN) reported a decline in industrial progress, despite the implementation of numerous policy initiatives aimed at fostering growth in the sector. This underperformance highlights a significant gap between the potential and actual impact of Nigeria's industrial sector on the country's economic development and prosperity. This paper thus examined the economic contribution of transportation modes—road, water, and air transport—to the growth of Nigeria's industrial sector using secondary data from the Central Bank of Nigeria (CBN) and applying the Autoregressive Distributed Lag (ARDL) model to establish long-run relationships between the variables. The findings revealed that road transport had a negative but significant impact on industrial growth, suggesting that poor road infrastructure, congestion, and maintenance issues increase logistics costs, negatively affecting industrial productivity. Conversely, air transport exhibited a positive and significant impact, highlighting its role in facilitating high-value, time-sensitive goods movement and international trade. Water transport also had a positive and significant effect on industrial growth, particularly in export-heavy sectors, indicating that efficient port operations and improved waterways reduce shipping costs and enhance trade competitiveness. The paper recommended that the Federal Ministry of Works and Housing, in collaboration with state governments and the private sector, prioritize road network rehabilitation and expansion. The Federal Airports Authority of Nigeria (FAAN) and Nigerian Civil Aviation Authority (NCAA) should focus on modernizing airport infrastructure, while the Nigerian Ports Authority (NPA) should address port inefficiencies and congestion to boost industrial exports. Further investments in these transportation modes are crucial for unlocking Nigeria's full industrial potential and fostering sustainable economic growth.