Introduction
Infrastructure serves as the backbone of economic development, playing a pivotal role in the movement of goods and services across regions. In Nigeria, however, poor infrastructure remains a fundamental bottleneck in the supply chain, significantly driving up the cost of transporting goods. According to the World Bank transport costs in Nigeria account for as much as 30% to 50% of the value of goods, one of the highest figures in sub-Saharan Africa.
Nigeria’s transport infrastructure is heavily skewed toward road transport, which constitutes over 90% of internal movement of goods and people. However, over 60% of Nigeria’s 195,000 kilometers of road network is in poor condition, and only about 15% is paved, according to the Federal Ministry of Works and Housing. Furthermore, the rail network, once an efficient means of cargo movement, has suffered decades of neglect, with minimal modernization and insufficient coverage. This leaves businesses overly reliant on roads that are often riddled with potholes, congested, and insecure.
A study by the Nigerian Economic Summit Group (NESG) in 2024 found that the cost of transporting a 20-ton truckload of agricultural produce from Maiduguri to Lagos, a journey of around 1,565km, can be as high as ₦2 million, largely due to damaged road networks, multiple taxes, and fuel costs.
Historical Context and Problem Statement
Historically, Nigeria has suffered from chronic underinvestment in infrastructure. Between 2000 and 2020, public capital spending on infrastructure remained below 5% of GDP, compared to 25% in China and 15% in India during their periods of rapid industrialization. This lack of investment, combined with corruption, poor maintenance culture, and fragmented institutional responsibilities, has left Nigeria with a dilapidated infrastructure system.
The policy implication of this is profound: high transportation costs reduce competitiveness, inflate consumer prices, and limit access to essential goods in rural and underserved areas. It also discourages local and foreign investments in manufacturing and agribusiness sectors that depend on efficient logistics.
The Issues
- Exorbitant Transportation Costs: Poor roads lead to higher fuel consumption, frequent vehicle breakdowns, and increased maintenance costs. These expenses are transferred to the cost of goods, resulting in inflated market prices.
Transportation Cost (GIGM) — 2023/2025
| 2023 / 2024 | 2025 | |
| Abuja to Lagos | #29,800 | #51,000 |
| Abuja to Enugu | #26,300 | #41,500 |
| Lagos to Port Harcourt | #29,500 | #42,000 |
| Bayelsa to Lagos | #24,700 | #31,700 |
| Akwa Ibom to Abuja | #30,100 | #36,100 |
2. Unpredictable Transit Times: Logistical inefficiencies due to poor infrastructure result in delays, spoilage of perishable goods, and missed delivery deadlines. These uncertainties hinder the reliability of supply chains and increase the cost of doing business.
3. Rural Isolation: Rural communities, especially in northern Nigeria, are often cut off from national markets due to bad roads. Farmers are forced to sell at lower prices locally or lose their produce entirely due to lack of access to larger markets.
4. Security Concerns: Bad roads increase travel time and make transporters more vulnerable to robbery, kidnapping, and extortion by illegal checkpoints.
5. Increased Informal Levies: Trucks frequently encounter multiple checkpoints where unofficial payments are demanded, adding non-transparent costs to goods transportation.
A startling fact is revealed by a report from News Central, which is based on surveys of 245 commercial drivers nationwide. The drivers revealed most common road conditions and they include:
Poor road conditions in Nigeria significantly increase the costs for transport operators. Over 75% of them face delays, longer travel times, and higher fuel consumption, all of which reduce economic efficiency.
Source: News Central
Nigeria’s most important roads for the economy
Source: Business Day
The image above highlights Nigeria’s most economically important roads, with the Lagos–Ibadan Expressway appearing as the busiest and most heavily used, while the Jos–Abuja route shows lower traffic levels in comparison. These roads play a key role in connecting major cities and supporting the movement of goods and services across the country.
Stakeholders Perspectives
Stakeholders such as transporters, farmers, logistics companies, and consumers are directly impacted by poor infrastructure, facing challenges like delays, high costs, and limited market access. Including their experiences in policy planning ensures that infrastructure solutions are practical, inclusive, and more likely to succeed.
Policy Models
A comparative overview of Infrastructure Budgets in Nigeria, South Africa and Egypt.
| Country | Local Currency Allocation | USD Equivalent | Key Focus Areas |
| Nigeria | #679 billion | $1.62B | Roads, Rails and Logistics. |
| South Africa | ZAR 402 billion | $21.5B | Roads, Logistics, Rail ( Private sector engagement ) |
| Egypt | EGP 3.5 trillion | $90.97B | Railways, Urban transport services. |
Nigeria’s current investment of about $1.62 billion USD in transportation infrastructure falls far behind what countries like South Africa and Egypt are putting into their systems. This low level of funding shows a clear gap in how seriously the country is treating the development of roads, bridges, railways, and other transport services. South Africa has committed around $21.5 billion USD over three years to improve and expand its transport network. Part of this plan includes working with private investors to boost rail transport and logistics. Egypt is going even further, with a massive $90.97 billion USD plan focused on building and upgrading railways, urban transport, and other key infrastructure to make movement easier and support economic growth.
Nigeria’s case is different. The shortage of quality transport infrastructure, especially roads and bridges, affects many parts of life. It makes it more expensive to move goods, slows down trade and business activities, and limits access to land and housing development. These problems are not just about money, they show the need for better planning and commitment. If Nigeria wants to grow its economy and improve living standards, it must increase funding for transport and make it a top priority in national development plans.
Implementing infrastructure reforms in Nigeria faces major hurdles including weak political will, funding limitations, bureaucratic inefficiencies, and corruption. Overcoming these requires stronger governance, financial discipline, and transparent, accountable systems.
Recommendations
To address the challenges identified and improve the efficiency of goods transportation in Nigeria, the following recommendations are proposed for the Federal Ministry of Transportation:
- Increase Infrastructure Funding through Public-Private Partnerships (PPPs)
Clear frameworks should be established for road and rail projects, attracting private capital and ensuring cost-effectiveness. Priority should be given to leasing key transport operators under vital transport corridors like Lagos-Ibadan and Abuja-Kaduna under build operate transfer models. Additionally, establishing an Infrastructure Fund backed by sovereign guarantees and overseen by a transparent board would further strengthen funding security and efficiency.
- Create a Dedicated Infrastructure Maintenance Fund
To ensure long-term durability of infrastructure, a dedicated Infrastructure Maintenance Fund should be established. A fixed portion of fuel tax revenues and toll collections can be set aside specifically for regular maintenance of federal and state roads. This fund should be managed transparently and insulated from political interference. In addition, adopting performance-based contracts with independent third-party audits will help guarantee that maintenance work meets high-quality standards and delivers value for public spending.
- Rehabilitate and Expand the Railway System
Accelerating the Nigeria Railway Modernization Plan will help update aging infrastructure and expand rail coverage nationwide. Strategic focus should be placed on linking industrial hubs and agricultural regions to key ports and cities, enabling smoother movement of goods and reducing transport costs. Collaboration with logistics companies and agro-processors will ensure steady cargo flow on new rail lines, making the system commercially viable and self-sustaining over time.
- Strengthen Security Along Transport Routes
The Ministry of Transportation should partner with security agencies to deploy Highway Protection Units along major freight routes. These units should use patrol teams, surveillance drones, and Global Positioning System tracking to monitor cargo movements and respond quickly to threats. A national transport safety hotline should allow drivers to report extortion or attacks in real time. Collaborating with transport unions and logistics firms will ensure practical implementation. Regular security audits and public updates will build trust. Safer roads will reduce delays, protect lives, and lower transportation costs, especially in high risk areas.
- Rural Roads Development Scheme
The ministry of transportation should rehabilitate rural feeder roads in farming areas through a dedicated fund and local partnerships. Tackle illegal checkpoints with mobile task forces and tech-based systems. Public campaigns should encourage reporting of extortion, promoting transparency and accountability across transport routes to ease movement of goods and support rural economies.
The Federal Ministry of Transportation must act with urgency and commitment to implement these reforms. Failure to do so will continue to inflate the cost of living, stifle economic growth, and worsen rural-urban disparities in Nigeria.
Conclusion
Improving infrastructure is not just an engineering challenge, it is an economic necessity. The high cost of transporting goods in Nigeria due to poor infrastructure is a major barrier to trade, food security, and industrialization. From decaying roads to an underutilized railway system, inefficiencies in logistics inflate consumer prices, discourage investment, and perpetuate regional inequalities.
However, the solutions are within reach. By adopting globally and regionally tested strategies, such as Public Private Partnerships, dedicated maintenance funds, and logistics digitization, Nigeria can chart a new course toward economic resilience and prosperity. With the political will, policy coherence, and stakeholder collaboration, the country can significantly reduce the cost of goods transportation and unlock its full economic potential.
Written by:
Chinaza Igwe
Research Assistant