Transportation Business in Nigeria

TRANSPORTATION BUSINESS IN NIGERIA: WHAT YOU NEED TO KNOW BEFORE YOU START IT

Table of Contents

Transportation business in Nigeria is no doubt one of the leading lucrative businesses with many areas left unexplored and untapped

In Nigeria, there are some industries that are generally known as money-making industries. Industries such as agriculture or food industry, health industry, ICT, or Technology and Transportation industry are known for their high return in investment.

This shows that; investing into industry like transportation business in Nigeria is a very feasible idea.

Because of the ready market and besides, those in the business already are racking hundreds of thousands from the industry.

Overview of transportation business in Nigeria

Transportation businesses in Nigeria continuously thrive every day especially with the rise in population, which is estimated to be about 200 million as of 2020.

In the first quarter of the year, GDP from Transportation business in Nigeria rose to about 296779.23 Million naira.

Another major reason, why transport business in Nigeria is very lucrative is because of the high demand for commercial users surpass the available vehicles.

Most times, car owners use commercial vehicles to move from one place to another.

Current estimation shows that 70% of the Nigerian population uses public transport. It shows that we have far less transportation companies than required.

How profitable is transportation business in Nigeria?

This must be the question in your mind, but I will answer this question with an illustration.

Take some time and visualize in your mind the number of people using the road daily in order to move to different places or transport their goods from one region to another.

I believe you have the answer already in your mind.

Everyday, thousands and probably millions of people travel within Nigeria for different legitimate reasons, varying from religious meeting, business, school, conferences, visitations etc.

If you still doubt, let me reveal some statistics from Federal Road Safety Commission (FRSC).

In 2015, FRSC statistics shows that about 5 million vehicles were registered legally.

Now, compare 5 million vehicles to 200 million people moving daily and see the huge need of transport vehicles.

In essence, transportation business is one of the very profitable businesses you can do to make money in Nigeria.

How much does bus drivers make in Nigeria?

The daily income of bus driver varies per day due to several factors such as; the city or state (e.g. Lagos bus drivers earn more than Benin bus drivers), distance, traffic and experience level of the driver.

Research from salary explorer shows that bus drivers in Nigeria earns around 101,000 NGN per month. Their income varies from 50,300 NGN (lowest) to 156,000 NGN (highest).

Modes/Types of Transportation

1. Motorbike or Motorcycle:

Motorcycle in Nigeria is popularly known as Okada. It is a two-wheel vehicle used in carrying passengers within a community, city, and villages.

It can carry one or two passengers aside from the rider for convenience sake.

Although, in Nigeria, some states such as Edo state, Lagos, and Delta state have banned the use of okada.

In big cities with several road networks, okada is normally patronized to carry people from one end to another.

2. Tricycle or Trike:

Tricycle (Maruwa/keke napep) for transportation business in nigeria

Tricycle in Nigeria is popular known as Keke-napep or Maruwa. It is a human-powered three-wheeled motorcycle.

It’s an advancement of motorbike and it has covered to protect passengers from the harsh climatic conditions.

Most states that had banned okada, has started using Keke-napep/Maruwa as their official transport vehicle. For convenience, it can carry three passengers but, in some regions, it carries four or five passengers at a time.

3. Car town service:

This is popularly known as taxi and it’s used to transport passengers in and out of the state.

It’s more secure and stable compare to keke-napep in the road and it can carry about 4 passengers for convenience. Although, some car town service carries 6 passengers.

4. Commercial bus or mini-bus:

Commercial bus in lagos for transportation business

It’s used majorly in cities and major towns to convey passengers from one location to another.

Commercial bus is the most used type of transportation of conveying people from one state to another.

It can carry more people compare to car town service and other modes of transportation.

5. Haulage transport service:

These are usually heavy-duty vehicles used in moving heavy and sizably goods for a price.

Examples of such vehicles are trailers, tankers trucks, container trucks, logistics vans, and tippers. They carry very few passengers.

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How to start a transportation business in Nigeria

Here is an analysis of how to start a successful transportation business in Nigeria, whether motorcycle, tricycle, taxi or commercial buses:

1. Choosing the type of transportation business

As highlighted above, I mentioned the different types of transport business in Nigeria. You can choose anyone base on your driving experience, skill, finance and time.

Although, when choosing a particular type of vehicle, have it in mind that the capital investment and daily returns from each varies of them greatly.

2. Decide on the location and routes that are lucrative

Perform proper research to ensure that the location you are planning to ply daily is best suited for the transportation business.

Especially, in terms of financial demands from council workers, state government and the area boys popularly known as “agberos”. Location of business maybe;

a.) Intercity transport services (i.e. your vehicle will be moving from state to state).

b.) Commercial intra-city transport (i.e. your vehicle will move within a particular state or region).

Start small to gain experience before venturing into it full time.

3. Purchase your choice vehicle and join a Union

You can either purchase your desired vehicle via lease, hire purchase, or an outright buy.

It’s important to note that registration of the vehicle and obtaining necessary permits and documentation is crucial.

To avoid impediments from the police or any local authority, if necessary, then join any association or registered and recognized body of drivers such as;

National Union of Road Transport Workers (NURTW), National Association of Government Approved Freight Forwarders (NAGAFF), etc.

4. Drive personally or engaging the service of a Driver

As a starter, it’s advisable to drive your vehicle yourself in order to manage and grow the profit margin of your business within the first year.

This is advised so that you can accumulate experience and knowledge about your vehicle and the business.

Afterward, you can engage the service of a driver because you know the likely challenges to face.

Peradventure you lack the necessary time to run the business, you can employ a driver and the following agreement must be reached;

a.) A regular amount of return from the driver each day or week.
b.) The punishment for not fulfilling the first requirements
c.) The driver must be professional
d.) The driver must be familiar with the vehicle
e.) The driver must be familiar with the vehicle
f.) The driver must come with two or more surety and documentation.
g.) Agreement on what to do in case any part of the vehicle is damaged
h.) Agreement on the care of the vehicle.

5. Grow the business:

Some percentage of money should be kept aside to purchase new vehicles.

While other percentage should be use to take care of the vehicle such as body repairs, regular checkup and engine maintenance.

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Cost of starting Transportation business

A yellow cab for transport business within the metropolis of lagos nigeria

The cost of starting a Transportation business in Nigeria varies due to mode or type of vehicle you are purchasing.

Other factors such as vehicle registration, obtaining drivers license, fees paid to obtain government, council or union documentation etc.

Some basic secrets of Transportation Business in Nigeria

1. Be cautious about your choice of drivers;

Due to the high rate of fraud in Nigeria, it’s very important that your driver must have track records and notable guarantor. This is to ensure safety in the future in case they misbehave.

2. Presume your driver is dishonest until proven otherwise;

While this may look harsh, it’s the best way to avoid being duped or taken for granted. There are several instances where bus owners have lost their vehicles to drivers because of trust.

3. Know the expected returns per day;

This is very crucial, to avoid excuses and cheating

4. Know the cost of repairs and maintenance of the vehicle;

This is important so as to avoid inflated price of vehicle parts from drivers and mechanics.

5. Agree on measures to take if the driver defaults any laid down rules;

This has to be decided and very rigid to avoid defaulters. And a third-party must be involve.

6. Always be ready to Hustle;

Stop acting quiet and soft because drivers and passengers will take you for granted. Rather be tough and hustle hard.

In conclusion, it may not be easy at first especially dealing with different kind of people but determination is needed to succeed in this business.

Also, avoid troubles from area boys and government officials. Obtain the vital license, documentation and pay the necessary dues.

Okuna Rapheal

Okuna Rapheal is a seasoned content developer, with a strong background in both professional writing, business development and digital marketing. He creates excellent contents that interests readers while maintaining a fluid voice as well as meeting the most esoteric of specifications.

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