The Impact of Rail Freight and Passengers Volume on Economic Growth in Nigeria: 1970 -2017

Abstract

The study investigated the impact of rail freight and passengers volume on economic growth in Nigeria (1970 – 2017). Annual time series data were sourced from Nigerian Railway Corporation, Federal Ministry of Transport, Central Bank of Nigeria and National Bureau of Statistics. The data were tested for stationarity using Augmented Dickey Fuller (ADF) test while the co-integration was conducted using Johansen’s test. The estimation technique employed for the time series data was Error Correction Model (ECM). The results show that, there is long-run equilibrium relationship between the key variables, Gross Domestic Product (GDP), Volume of Freight (VOF) and Volume of Passengers (VOP). ECM also has the expected negative sign and is between the accepted region of less than unity. The result showed VOP has a positive relationship with GDP but does not have significant impact on
GDP. VOF has a negative relationship but has significant impact on GDP. The negative impact of VOF on economic growth can be attributed to total neglect of railway sub-sector in Nigeria by successive government. The study therefore recommends that government should continue to increase capital expenditure in the rail sub-sector in order to rehabilitate old and provide modern rail tracks, purchase modern coaches and locomotives will aid movement of passengers and goods across cities and the hinterland which will boost economic activities, increase output, facilitate trade and generate employment across the country.