Analysis of the Costs of the Different Modes of Transportation in Nigeria between 2019 and 2021
Today our focus will be on the trend of transportation costs in Nigeria between 2016 and 2021. We will zoom in on the observed trends between 2019 and 2021. We will highlight the trend of transportation costs in Nigeria and relate it with some of the economical and non-economical occurrences across the country within the last 3 years.
The data used for this analysis was extracted from the website of the Nigeria bureau of statistics that was released at the end of August 2021. The data contains information on five modes of transportation; Air Transportation referred to as “One Way Air Transport”, Water Transportation, Motorcycle transportation referred to as “ Journey by Motorcycle (Okada) per” and Bus Transportation.
The programming language used for this analysis is R, utilizing various packages such as dplyr, tidyr, plyr, purr, stringr, zoo, lubridate, readr and readxl for all importation and data wrangling activities. The visualization was done using the ggplot2 and ggthemes package. All codes related to this project can be found on my Github profile here.
Now, let’s head into our data.
Firstly, we’ll look at the average costs of transportation for each mode of transportation across all the geo-political zones in Nigeria for 2021. For the first and second quarters of this year, the country experienced some of its highest and most alarming food inflation rates. Was this a result of a drastic increase in transportation costs? Let’s examine the next chart to find out.
The states with the highest agricultural activities in Nigeria are predominantly located in the north-central and north-western parts of country. The most commonly used mode of transporting agricultural products in Nigeria is road transport, which we refer to here as “Inter-city Bus Transport” considering that goods are moved from rural locations in each state and aggregated mostly at the capital city from where they are shipped to other parts of the country. We could see that the transportation costs in both the north-central and north-western parts of the country are extremely high relative to other regions. Although some states in the southern part such as Lagos and Rivers states can also be seen to have a high cost of inter-city transportation, we will not dwell too much on them due to their low level of agricultural activities compared to the states in the north-central and north-western parts of Nigeria.
We could see from the chart above that the cost of inter-city transportation in the north-central and north-western parts went up as high as 4,000 naira in Abuja per individual and trip. We can now infer that the rising cost of food products in the southern part of Nigeria during the first and second quarters of 2021 was mainly a result of the increase in the cost of inter-city transportation costs within these north-central and north-western states.
The most appropriate question to ask next will be why were such high rates recorded? The chart below will provide more insights into that question.
We can see that the highest cost of inter-city transportation occurred within these regions during the last quarter of 2020. Although not entirely, this can be mainly attributed to the effect of the lockdown measures taken to prevent the spread of the Covid-19 on the Nigerian economy. Recall, that the Nigerian economy slide into recession during the third quarter of 2020, due to the shutdown of all major economic activities. These extremely high transportation costs were mainly in response to the prevailing economic condition in the country during that period. As shown in chart 3 below, there is a pattern showing that the inter-city cost of bus transportation dips during the third quarter of every year and expands during the fourth quarter. We could also see that the costs from Q4 2020 have been slightly higher than the costs in the corresponding periods of previous years, even though similar trends could be observed.
Going back to the first chart, one other salient thing we can observe is the huge disparity between the costs of water transportation within the south-southern part of Nigeria compared to the other regions. This could be explained to be either because of the high rate of water as a means of transportation between and within some of their cities and it could also be due to their proximity to the south Atlantic Ocean and Cameroon.
Finally, we will investigate the effect of covid-19 on the year-on-year growth of transportation costs in 2020. The chart shown below highlights the year-on-year growth of the costs of transportation for each mode of transportation across all the regions in 2020.
The highest year-on-year growth can be seen for motorcycle trips within each city. This of course is expected considering that a large percentage of Nigerians do not own cars. And this is followed closely by the cost of intra-city bus transportation. On the flip side of it, the most badly hit is the aviation industry with the cost of prices growing in the negative in some states across the country. Apart from the restrictions placed on air travel by the government during the peak of the pandemic, another reason for this negative growth could also be due to the additional costs of Covid-19 tests required for every air trip from the passengers.
The objectives of this analysis were to highlight the relationship between the costs of transportation in 2021 and the increase in food prices, and the effect of Covid-19 on the growth of transportation costs in 2020.
We could see that the severe increase in prices of food commodities coincided with the period where we had a corresponding increase in the cost of inter-city bus transportations in the regions that were important to food production in Nigeria. We could also see from the analysis that Covid-19 had different effects on the different modes of transportation, positive price growth for motorcycles and intra-city transportations, and negative effects on the costs of air transportation.
