Transportation Business In Nigeria: What You Need To Know Before You Start It

Nigeria’sNigeria’s transportation business is undoubtedly one of the leading lucrative businesses, with many unexplored and untapped areas.

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

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

Because of the ready market, those in the business 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 a population estimated to be about 200 million as of 2020.

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

Another major reason the transport business in Nigeria is very lucrative is that the high demand for commercial users surpasses the available vehicles.

Car owners often 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 fewer transportation companies than required.

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How profitable is the 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 the number of people using the road daily to move to different places or transport their goods from one region to another.

I believe you have the answer already in your mind.

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

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

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

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

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

How much do bus drivers make in Nigeria?

The daily income of bus drivers 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 driver experience level.

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

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Modes/Types of Transportation

1. Motorbike or Motorcycle:

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

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

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 popularly known as Keke-napep or Maruwa. It is a human-powered three-wheeled motorcycle.

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

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

3. Car town service:

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

It’s more secure and stable than Keke-napep on 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’sIt’s used in cities and towns to convey passengers from one location to another.

The commercial bus is the most used transportation for 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 for a price to move heavy and sizable goods.

Such vehicles include trailers, tanker trucks, container trucks, logistics vans, and tippers. They carry very few passengers.

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

1. Choosing the type of transportation business

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

Although, when choosing a particular type of vehicle, remember that the capital investment and daily returns from each vary greatly.

2. Decide on the location and routes that are lucrative

Perform proper research to ensure that the location you plan 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 are popularly known as “agberos.” The location of the business may be;

  • Intercity transport services (i.e., your vehicle will be moving from state to state).
  • 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 purchase your desired vehicle via lease, hire, or outright buy.

It’sIt’s important to note that registration of the vehicle and obtaining necessary permits and documentation are 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 engage the service of a Driver

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

This is advised to accumulate experience and knowledge about your vehicle and the business.

Afterwards, 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 regular return from the driver each day or week.
  • The punishment for not fulfilling the first requirements
  • The driver must be professional
  • The driver must be familiar with the vehicle, e.) The driver must be friendly with the vehicle
  • The driver must come with two or more sureties and documentation.
  • agreement on what to do if any part of the vehicle is damaged
  • Agreement on the care of the vehicle.

5. Grow the business:

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

While another percentage should be used to take care of the vehicle, such as body repairs, regular checkups, and engine maintenance.

Cost of starting a Transportation usiness

A yellow cab for transport business within the metropolis of Lagos Nigeria

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

Other factors include vehicle registration, obtaining a driver’s license, fees paid to receive government, council, or union documentation, etc.

Some basic secrets of Transportation Business in Nigeria

  1. Be cautious about your choice of driversDue to the high fraud rate in Nigeria, your driver must have track records and a notable guarantor. This is to ensure safety in the future in case they misbehave.
  2. Presume your driver is dishonest until proven otherwiseWhile 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 dayThis is very crucial to avoid excuses and cheating
  4. Know the cost of repairs and maintenance of the vehicleThis is important to avoid inflated vehicle parts prices from drivers and mechanics.
  5. Agree on measures to take if the driver defaults to any laid down rulesThis has to be decided and very rigid to avoid defaulters. And a third party must be involved.
  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, especially dealing with different people, but determination is needed to succeed in this business.

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