An
efficient transportation sector facilitates exchanges that result in the
improvements of lives and economies globally. Every day, transport stakeholders
develop new ways that support the sustainability of this sector. This stems
from the knowledge that the movement of humans, goods and services remains a
fundamental part of a country’s economy, and extensively, global economic
growth.
In
the third-quarter economic performance report for 2021 released by the Nigeria
Bureau of Statistics (NBS), the growth in the non-oil sector cannot be
overlooked, with the transportation sector also making significant leaps in the
quarter, making it one of the fastest-growing sectors in Nigeria in Q3 2021.
The
modes of transportation that made these impressive contributions to the economy
were rail transport and pipeline (59.93 percent), air transport (33.31
percent), road transport (21.11 percent), and water transport (16.30 percent).
For a country with over 200 million people, the need for a robust means of
transportation cannot be overemphasized.
And
this guides the Federal Government’s decision to put initiatives in place to
close the gap in the transportation sector through a multi-modal transport
system. Although these initiatives are yet to be unveiled, the Lagos State
Government has embarked on its own ambitious multi-modal transport system in a
bid to upgrade the state to smart city status.
According
to the state government, there is fund available to complete the various
projects, including the creation of rail lines for intra city trips and other
works that will put the proper infrastructure in place for an efficient
transport system in the state. To further drive this conversation on the
importance of building a sustainable transport system in the metropolis, the
Lagos Transport Fest, held on December 13, 2021, drawing stakeholders from both
the public and private sector to discuss the way forward in improving Nigeria’s
transport system.
The
event focused on every aspect of transportation including road, rail,
logistics, and ports, noting the importance of a cross-sector partnership to
develop the transport sector. In the outline of the event’s agenda, one element
made a repeated appearance: technology.
This
highlights the fact that technology can bring about changes in the operations
of businesses within the rail, maritime, aviation, and road modes of
transportation. Technology has continued to prove itself a force to reckon
with, evident in the unprecedented changes it has produced across sectors, and
the transport sector in Nigeria is not any different.
These
perceived and observed changes have led to a steady rise in its utilization, as
digitization of processes in various economic quarters has become not just
widely accepted but even encouraged. Speaking along these lines was one of the
event’s sponsors, Interswitch,
Africa’s leading digital payment company, who noted the effect of innovation on
the country’s transport sector would increase accessibility to safe payment
methods and the attendant ease for commuters.
The
need for digitization in the transportation business became notable during the
heat of the pandemic, as innovators devised new ways to conduct their
businesses without the need for physical contact between individuals. This was
especially observed in the logistics sector that saw more companies adopting
technological solutions while minimizing physical contact.
In
developed countries, other solutions such as robotics, drones, the Internet of
Things (IoT) and Artificial Intelligence (AI) swiftly became a replacement for
humans to reduce human contact and by extension, the spread of the virus.
Transportation and the AfCFTA
It
would almost be remiss if there was no mention of Intra-African trade through
the Africa Continental Free Trade Agreement (AfCFTA), which is expected to
facilitate stronger trading relations between countries on the African
continent. With this in view, experts have highlighted the deficits in the
transportation sector that could hinder Nigeria – Africa’s current leading
economy – from accessing its full potential, relegating it behind other smaller
African nations with better systems in place.
However,
giving reassurances of the country’s readiness to participate in this
monumental intra-continental trade, the Minister of Transportation, Rotimi
Amaechi, said, at a 2-day conference, that the Federal Government had taken
seriously the business of transportation.
He
noted that “The transportation sector is the most critical in implementing
trade facilitation, enhancing regional integration is key to every other AfCFTA
protocol. Hence, the Nigerian government has embarked on huge transport
infrastructure investment across the country to ensure efficiency in the
transportation sector.”
He
also highlighted the importance of digitization in the sector as one of the
major elements that requires a sturdy infrastructure for a successful
intra-continental trading. The minister noted that his ministry was dedicated
to improving digital services in the transport system through the automation of
services.
In
the same vein, analysts are projecting a boost in free trade in Africa through
digitization. With about 36 countries ratified onto the AfCFTA, it is estimated
that over 1 billion consumers on the African continent, with a growing Gross
Domestic Product (GDP) of $3.4 trillion will be integrated.
However,
the ever-fluctuating, dollar-reliant exchange rate system on the continent
remains a challenge to trade within the continent. To address this, the African
Export-Import Bank (Afreximbank), in collaboration with the West African
Monetary Institute (WAMI), developed the Pan-African Payment and Settlement
System (PAPSS) to facilitate cross-border payment between traders in Africa,
which would involve participating central banks.
Interswitch,
through some if its brands, has continued to enhance cross border payments – Quickteller,
a borderless digital payment solution service and Verve card, a payment card
issued in 8 African countries with acceptance in over 22 countries on the
continent. These services and products are aiding payment between African
traders, removing transaction barriers.
To
take full advantage of this untapped market, countries would need to develop
better transport infrastructure and systems and fortify payment systems to
lessen the stress that comes with it, which will help to properly connect
markets across the continent and achieve the overarching goal of a prosperous
continent.
Enormous
opportunities abound in the transport sector, but to tap into these there is
the need for a concerted effort from stakeholders in both the public and
private sectors to ensure that consumers have seamless experiences while moving
goods, services, people and payments across borders.
