THE EFFECT OF HIGH COST OF TRANSPORTATION ON NIGERIA ECONOMY AND ITS EFFECT ON CONSUMER GOODS
ABSTRACT
In a sophisticated nation like Nigeria, transportation is extremely important. Distribution cannot exist without it. In light of this, the subject is “The Impact of High Cost of Transportation and its Influence on on Cost of Consumer Goods in Enugu Metropolis. Both an oral interview and a questionnaire were used in the investigation. Tables and analysis were utilized by the researcher to streamline the information gathered. The researcher simplified the data gathered for sample determination using tables and analysis. The researcher utilized Bourely’s formula to get the sample size, and chi-square was employed to test the hypothesis. In conclusion, expensive transportation makes items perishable because they can’t be delivered to the final consumer by the scheduled time, thus it is advised that the government a vehicle should be available to service all selected urban regions for each access and evacuation urban locations to facilitate the easy access and evacuation of consumer goods from rural to urban areas. Moreover, consumer goods should be subsidized by creating consumer cooperative societies.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In a developing nation like Nigeria, transportation is crucial.
It is the main driver of every country’s economic growth. Distribution depends heavily on transportation. This is due to the fact that something produced at one time has little value unless it is transported to a location where it is required or desired.
To move the generated item, distribution channels are required. In a vacuum, large-scale production is impossible without transportation. Even the largest, most effective manufacturing facility must sell its output to end users in order for it to be useful.
These products can never be sold unless they are they are distributed to the areas where they are demanded. Transportation therefore makes it pos Ssible for the distribution of products from the areas where they are sold.
It is said that “transportation broader the market”. An adequate transportation system provides the means by which mass distribution and production takes place.
The Nigerian transportation system which was developed during the colonial era, with railway, road transportation and later developed to sea and air line transportation modes inefficient.
The problems of transportation includes:
1. Bad roads and rail for land transportation.
2. Cost of maintenance
3. Inadequate technological know-how for maintenance of available vehicle.
4. Increase in petrol oil by the Federal Government
Because of these problems, the transport system
operators, who are mainly individual “before the introduction of mass transit system found it very difficult to still stay in business. Owing to the fact that, it is very hard to import new vehicles into the country, people diverted to the importation of fairly used vehicle popularly known as “Belgium” for it is cheaper to acquire.
These fairly used vehicles turn out to break easily when used on our bad roads.
The transport operators have no alternative but to charge high transport fairs whenever their vehicle are in order.
Since this industry is the foundational service sector to all prior states, the high transportation cost began to have an impact on the economy as a whole. The following are some of the variables this study will use to try to ascertain how much the high cost of transportation influences the process of cost of transportation affects the process of consumer products in particular:
Customers argue that rising prices are a sign of the sellers’ emphasis on making a profit.
1.2 STATEMENT OF PROBLEM
For many years, the cost of consumer products has been steadily rising in Nigeria. These price hikes are allegedly the result of increased transportation costs brought on by the elimination of gasoline subsidies.
Because of the impact of this high cost of delivery, the research has focused on consumer items. The majority of people in Nigeria use transportation for both business and other purposes. The high expense of both intra- and inter-city road travel in Enugu urban has made life extremely tough for those who live there and has had a severe impact on the local economy of Enugu metropolitan in Enugu State.
In light of the aforementioned issues, the researcher has determined to carryout research which is very timely on the topic “The effect of high cost of transportation of Nigeria economy and its effect on the cost of consumer goods.
1.3 OBJECTIVES OF THE STUDY
Everyone in the community is impacted by retailers’ actions in the market, and the majority of consumers are unhappy with the rapid rise in prices caused by the removal of fuel subsidies, which shifts the burden on transportation costs. This research is intended to:
1. Calculate the impact of high transportation costs on the cost of commodities, especially in the city of Enugu.
2. To understand how expensive transportation affects consumer goods.
3. To determine the reasons behind the high shipping costs for consumer goods.
4. Learn what may be done to address the issue of rising consumer goods prices on the market.
1.4 RESEARCH QUESTIONS
1. Do you think that there is need to determine the effect of high cost of transportation on consumer goods.
2. What are the causes of high cost of transportation in Enugu metropolis?
3. Do transport cost affect the consumption pattern of consumer?
4. What do you think should be recommendations on how to alleviate the problem surrounding the study.
1.5 RESEARCH HYPOTHESIS
H0: Increase in transportation fare has lead to high in prices of consumer goods.
H1: Increase in transportation fare has not lead to high in prices of consumer goods.
H0: High cost of transportation does hampers the evacuation of agricultural products
H2: High cost of transportation does not hampers the evacuation of agricultural products
1.6 SIGNIFICANCE OF THE STUDY
The following will find great benefit in this work:
1. The individual transport operators and businesses for whom it will act as a manual to increase productivity.
2. It will also be very beneficial to students and anyone who might be working on similar research projects.
3. The government and other organizations in charge of managing the nation’s transportation system will also profit.
4. The general population, who will learn about the effects of high transportation on them and then decide how to proceed, will also benefit from this study.
1.7 SCOPE OF THE STUDY
This study which covers only the effect of high cost of transportation on Nigerian economy and its effect on the cost of consumer goods using Enugu metropolis as the case.
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