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THE EFFECT OF HIGH COST OF TRANSPORTATION ON NIGERIA ECONOMY AND ITS EFFECT ON CONSUMER GOODS

ABSTRACT

Transportation is very essential in developed country like Nigeria. It is an integral part of distribution.  Therefore the topic entitled “The Effect of High cost of transportation and its effect of on cost of consumer goods n within Enugu Metropolis. The researcher has carried out research using questionnaire and oral interview.  The researcher used tables and analysis in simplifying the data collected. In sample determination the researcher used tables and analysis in simplifying the data collected. In sample determination the researcher used Bourelys formular in which chi-square was used in testing the hypothesis. In summary high cost of transportation leads to perishable of goods due to inability of the goods to delivery to final consumer to appointed time.  and it is recommended that government should provide vehicle to service all identified urban areas for each access and evacuation urban areas for easy access and evacuation of consumer product from rural areas to consumer product from rural areas to urban areas.  And should subsidy consumer goods through forming consumer co-operative society.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY   

Transportation is very important in a developing country like Nigeria.  It is the major root of economic development of every nation. Transportation is an integral part of distribution.  This    is because an item produced at one point has little value unless it is moved to the place where it is needed or demanded. It is necessary to have distribution systems to move the item produced. Large scale production cannot exist in a vaccum without transportation. The most efficient large scale production plant cannot operate unless the things produced are sold to the final consumers to yield utility.

These products can never be sold unless they are they are distributed to the areas where they are demanded.  Transportation therefore makes it possible 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.

This high transportation cost started affecting the economy as a whole as this sector is the basic service sector to all earlier state. Among the variable this study will attempt to determine the degree to which high cost of transportation affects process of cost of transportation affects process of consumer goods particularly this study tries to find out the following:

        The consumers challenge that the increasing prices are indication of the profiting attitude of sellers.

1.2  STATEMENT OF PROBLEM

There has been a continuous increase in the prices of consumers goods in Nigeria for many years. These prices increase have been alleged to be as a result of increase in transportation cost, associated with removal of fuel subsidy.

The effect of this high cost of transportation and hence, the research has concentrated his research work on consumer goods. Most of this Nigeria populace use transportation for their commercial and other activities. The high cost of both inter city and intra city road transportation in Enugu urban has made life very difficult for the resident of the state and has negatively affected the economy of Enugu metropolis area of Enugu State.

        It is in the light of the above problems that the researcher has decided 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

The activities of retailer in the market affect everybody in the society and most consumers are dissatisfied with rapid increase by removed of fuel subsidy which transfer it burden to transportation cost.  This study is design to:

1.           Determine the effect of high cost of transportation on the prices of consumer goods particularly in Enugu metropolis.

2.           To know how the high cost of transportation effect consumer goods.

3.           To identify the causes of high cost of transportation in consumer goods.

4.           Findout what can be done to alleviate the problems of increase prices of consumer goods in 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

This work will be of immense value to the following:-

1.           The individual transport owners and companies whom it will serve as a guide to improvement of their efficiency.

2.           It will also go a long way in helping the students and others who may be conducting research work on the same field.

3.           The government and other agency responsible for transport operation in the country will not be left out, they will also benefit.

4.           This work will be also be of value to the general public who will be informed of the effect of high transportation on them and then will resolve on how to go about it.

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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