Transport Sector Background

The Transport sector, which encompasses road, railways, waterways, and seaports, is very important to the development of the economy. It adds to the economic and social growth of every nation. The success of the transport sector depends largely on how viable its network operates.

In the case of rural agricultural production, improving transport may lower input prices and hence production costs, improve access to credit, facilitate technological diffusion, increase the area of land under cultivation, or increase the availability of „incentive” goods.

One study on Nigeria (Balwinder Singh, „An Analysis of Market Infrastructural Problems in the Green Revolution Period in Nigeria”, Economic Affairs, Vol. 31, No. 4, 1986) reported the substantial costs to farmers due to inadequate transportation facilities connecting rural areas to market towns. On a national level, improved transport may increase trade and competition from imports, which in turn may lead to improved production efficiency, putting downward pressure on consumer prices and reducing seasonal fluctuations in price.

In urban areas, the price and quality of transportation and other types of infrastructure significantly affect firms' decisions about where to locate and ultimately affect firms' output. An effective transport system can improve trade, urban and rural production, urban–rural links, regional development, and the functioning of markets. Effective transport improves personal welfare (reducing time spent travelling and allowing flexibility in the choice of a job, school, or residence). It is essential to efforts to alleviate poverty (for getting people to work, for example, or to public facilities, and for allowing family-based micro enterprises to flourish.

Aviation Sector Background

The birth of civil aviation in Nigeria was brought about in 1935 when aerodromes were developed and commissioned in Lagos, Kano, and Maiduguri. In 1970 the Federal Government launched the Airport Development Plan (ADP), which served as a springboard for the progressive development of the existing airports in Nigeria. The Federal Government’s objective was to open up corners of the country to access and development through creation of airports in each state capital. To date the Federal Government has invested by way of grants N3.8billion and in the form of soft loans an accumulated sum of N1.7billion on FAAN airports. The total assets worth of the 20 airports as at February 1999 was N163.9billion including navigational aids and associated equipment.

The Nigerian aviation industry enjoyed growth from the oil boom period of the 1970s. During the period, the industry grew into a multi–sfaceted, profit driven sector of the national economy. There was tremendous growth in number of operators, airports and passenger traffic. However the industry witnessed serious decline due mainly to growing cost, poor management, bad policies and unfriendly investment environment.

Today, the Nigerian aviation industry needs improved funding, and more investment in technology to give the sector the capacity to profitably meet the needs of a fast growing market and fit into the global aviation industry of the 21st century. To propel the sector in the right direction therefore, effective reforms are necessary concomitant. Sector reform will be implemented in the following sequence:

• Policy review and formulation
• Review of legal and regulatory framework
• Sector restructuring
• Privatization