Transportation Infrastructure and Economic Growth in Nigeria: 1981 -2017

Abstract

This study examined the relationship between transportation infrastructure and economic growth in Nigeria using time series data for the period of 1981 to 2017. The study employed Vector Error Correction Model (VECM) granger causality test based on the result of unit root and cointegration test. The results revealed that, there is bi-directional relationship between real gross domestic product, transportation labour force, per capita road density which measures road coverage and amount of road transportation in GDP. Also, unidirectional causality relationship between from real gross domestic product, amount of air transportation in GDP, amount of rail transportation, transportation labour force, per capita road density in Nigeria in the short run. Similarly, the result showed that, there is long run relationship among the variables in the model and the granger causality test conducted on the lags of explanatory variable and the error correction term revealed a statistically significant causality at 1% significance for all the variables except that of amount of air transportation in gross domestic product. We therefore conclude that, there is a causal relationship between transportation infrastructure and economic growth in Nigeria. It is therefore recommended that, government should exert more efforts in improving infrastructural facilities in the transportation sector most
especially rail transport which has the capacity to reduce the concentration of movement of goods and human on the road to ensure durability of the existing roads.