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Average Transport Fare Surges 98% After Fuel Subsidy Removal

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Transport Fare

By Adedapo Adesanya

* Cost of other alternatives transport soar in Review Month

** Ripples of fuel subsidy spur rise in food, rent, others

*** President Tinubu launches palliative measures to cushion effect

The average fare paid by commuters for bus journeys within the city per increased by 97.9 per cent from N649.59 in May 2023 to N1,285.41 in June 2023 as Nigerians grapple with a rise in prices after President Bola Tinubu announced the removal of fuel subsidy.

This was contained in the Transport Fare Watch June 2023 released by the National Bureau of Statistics (NBS) over the weekend, confirming the grim reality that the average commuting Nigerian faces on a daily basis.

In the report seen by Business Post, it was shown that on a year-on-year basis, the average cost of bus fare rose by 120.63 per cent from N582.61 in June 2022 to N1,285.41 in the review month.

In another category, the average fare paid by commuters for bus journey intercity rose by 42.1 per cent on a month-on-month basis to N5,686.49 in June 2023 from N4,002.16 in May 2023. On a year-on-year basis, the fare rose by 55.3 per cent from N3,662.87 in June 2022.

President Tinubu during his inauguration speech on May 29 announced that fuel subsidies, which gulped N4.3 trillion alone in 2022, were no more since the administration of Mr Muhammadu Buhari did not make provisions beyond June 2023 in the budget.

This caused an instant surge of over 40 per cent, creating a ripple effect in other basic needs like food, shelter, and other transportation alternatives over demand increase.

In air travel, the average fare paid by air passengers for specified routes’ single journeys increased by 4.9 per cent from N74,948.78 in May 2023 to N78,640.54 in June 2023. On a year-on-year basis, the fare rose by 40.2 per cent from N56,082.64 in June 2022.

The average transport fare paid on commercial motorcycle, otherwise known as Okada transportation was N618.52 in June 2023, 33.1 per cent higher than the rate recorded in May 2023 (N464.55). On a year-on-year basis, the fare rose by 48.3 per cent when compared with June 2022 (N416.97).

For water transport (waterway passenger transportation), the average fare paid in June 2023 increased to N1,366.22 from N1,045.15 in May 2023. On a year-on-year basis, it increased by 44.8 per cent from N943.26 in June 2022.

On state profile analysis, Bauchi state recorded the highest bus journey within the city (per drop constant route) in June 2023 with N1,700.00, followed by Jigawa with N1,570.00. On the other hand, Imo state recorded the least with N710.00, followed by Adamawa with N840.00.

For intercity bus travel (state route charged per person fare), the highest fare was recorded in Abuja with N8,500.00, followed by Anambra with N8,000.00. The least fare was recorded in Kwara with N3,400.00, followed by Zamfara with N3,700.00.

Similarly, Delta State recorded the highest air transport charges (for specified routes single journeys) with N87,000.00, followed by Kebbi with N83,500.00. Conversely, Abia recorded the least fare with N70,000.00, followed by Niger with N73,000.00.

Also, Lagos state had the highest motorcycle transport fare in June 2023 with N900.00, followed by Taraba with N850.00. The least fare was recorded in Edo with N250.00, followed by Bayelsa with N300.

In terms of water transport fare, the highest was in Rivers with N5,000.00, followed by Bayelsa with N4,500.00, while the least fare was recorded in Borno with N450.00, followed by Kebbi and Gombe with N500.00 each.

Analysis by zone showed that in June 2023, transport fares of bus journeys within the city recorded the highest in the South-South with N1,411.67, followed by the North-East with N1,318.33, while the South-East recorded the least with N1,162.00.

In terms of bus journey intercity, the South-East had the highest fare with N5,950.03, followed by the South-West with N5,916,67, while North-Central recorded the least with N5,398.57. The North-East recorded the highest fare of air transport in June 2023 with N80,650.00, followed by the South-South with N80,000.00, while the North-Central had the least with N76,357.14.

Also, commuters on a motorcycle (Okada) paid the highest fare in the North-East and South-West with N690.00 each, followed by the North-Central with N667.14, while the North-West recorded the least with N473.57. The South-South zone had the highest fare on water transport with N3,533.33, followed by the South-West with N1,275.00, while the North-East had the least with N783.33.

President Tinubu in a television broadcast on Monday, July 31, announced over $500 million financial package to assist households hurt by his economic reforms.

He defended his decision to scrap the fuel subsidy, saying it only benefited a few so-called elites, saying he was aware of the hardships that the decision caused citizens and promised his government was working to help.

The latest measures announced by the president include allocations for a review of the minimum wage, support for micro-, small- and medium-scale enterprises, and the purchase of 3,000 gas-powered buses to reduce the cost of transportation.

President Tinubu also ordered the immediate release of 200,000 metric tons of grains to households, in an effort to lower prices and 225,000 metric tons of fertilizers, seedlings and other inputs to farmers.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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Lagos to Reform Korope, Danfo

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korope danfo

By Adedapo Adesanya

The Lagos State Government has said it is ready to integrate mini and midi buses, popularly known as Korope and Danfo, into the state’s Bus Reform Initiative.

The Special Adviser to Governor Babajide Sanwo-Olu on Transportation, Mr Sola Giwa, made this known in a statement on Thursday in Lagos.

In the statement signed by the Director of Public Affairs of the ministry, Mrs Bolanle Ogunlola, the governor’s aide said the project was in the planning phase.

“The documentation process for bus operators interested in the scheme is ongoing, with 10 operators having submitted letters of intent to the state Ministry of Transportation, of which six have already been confirmed.

“All participating buses will undergo physical verification by the Vehicle Inspection Service and Motor Vehicle Administration Agency to ensure their roadworthiness and proper documentation.

“Once verified, the buses will be branded in the Lagos Metropolitan Area Transport Authority colours and will be equipped with validators,” he said.

Mr Giwa also said that a framework was being developed to integrate union dues deductions into an e- ticketing system, while addressing activities of hoodlums extorting money from transporters.

He said that the initiative would be test-run for three months before full implementation.

He said that full implementation of the reform would prevent mini buses from operating on the Lekki-Ajah Expressway.

Mr Giwa said that the buses would be deployed to inner routes and communities.

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Nigeria Gets €245m Chinese Loan for Kaduna-Kano Rail Project

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Kano-Kaduna rail project

By Adedapo Adesanya

China Development Bank (CDB) has recently granted the first tranche of a loan worth €245 million ($255 million) to support the Kaduna-Kano railway in Nigeria.

This will provide crucial financial backing to ensure the smooth construction of the transportation initiative, the CDB said on Tuesday.

The railway is on the list of practical cooperation deliverables released during the third Belt and Road Forum for International Cooperation in 2023.

The project has been making steady progress so far, the CDB said, adding that going forward, it will closely coordinate with Nigerian partners to ensure the smooth disbursement of subsequent loans and effective post-loan management.

The Kaduna-Kano railway, spanning 203 kilometres in total, is set to provide a direct rail connection between Kano, an important northern city in Nigeria, and the country’s capital Abuja upon its completion, according to the CDB.

In July 2024, the Senate Committee Chairman on Land Transport, Mr Adamu Aliero reaffirmed the commitment of the National Assembly in ensuring that funds are made available for timely completion of the project.

Mr Aliero, while speaking to the press on the sidelines of the inspection at Maikarfi, Kaduna State, explained that the joint committee of both the House and also the Senate were on site to inspect the construction of a rail line between Kaduna to Kano.

“We have just taken a ride from Kano to Maikarfi. So far, we are impressed with what we have seen. We have seen a lot of dedication by the ministry and also by the contractor trying to deliver the project in time, I think 2025, they said.

“We understand that the deadline given to them is 2025 or 2026. But we are hoping that by 2025 if they sustain the tempo, they will be able to deliver. We will lobby our colleagues in the National Assembly to ensure that this project does not suffer from inadequate funding.

“There are other challenges connected with the project, particularly the funding arrangement, which we intend to discuss with the Minister of Finance, the Attorney General of the Federation, and also the Minister of Transportation,” he added.

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Future of Transportation is Electric Not Fuel, is Africa Ready?

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Timi Olubiyi Future of Transportation

By Timi Olubiyi, PhD

The year 2025 comes with a lot of hope and many aspirations, one of such is the increased benefits and possibilities around electric vehicles (EVs).

Even though, it is no more news and that it does not come as a surprise that the petrol and diesel-powered automobile/cars we have long been accustomed to still dominate the motoring landscape and indeed Africa with all the innovations and developments around mobility and transportation.

No doubt, the world is advancing clean and renewable energy options in particular around electric vehicles (EV) adaptations. More so the popularity of EVs is growing and the disruption is already rapid in developed economies. But what baffles the author is that Nigeria seems not to be bothered and we continuously move on with our daily tasks without referencing what happens around us globally.

It is a common knowledge that the way to go is net zero emissions by 2050 across all business units and supply chains including transportation. This is a key priority and a growing renewable energy footprint around the world but Africa is to the contrary from context observation.

From the records and with a follow up survey by the author in 2024 across the Republic of Ireland a small country with a population of less than 6 million, as it stands four out of every five homes now power their cars with 100% electric because the future of energy is electric.

Such acceptance can promote energy security, zero-emission, reduced energy cost and sustainable future easily without any economic concerns. Is this achievable in Nigeria in the nearest future? Achieving net-zero emissions in Africa presents significant challenge due to factors like limited access to reliable electricity, reliance on traditional fuels, and underdeveloped and old infrastructure.

In Nigeria and indeed most countries in Africa transportation sector is one of the largest contributors to global carbon emissions, with traditional gasoline(fuel) and diesel vehicles being primary sources of air pollution and environmental degradation.

In response to these concerns, the rise of electric vehicles (EVs) could represent a significant shift towards more sustainable and eco-friendly transportation options yet we are at the infant stage of adoption on the continent. As the world grapples with climate change and the depletion of fossil fuels, electric vehicles offer a promising solution to reduce pollution, enhance energy efficiency, and promote sustainability.

Therefore, this piece presents key benefits, and the need to explore policy options for future potential of electric vehicles in Nigeria and indeed on the continent of Africa.

From observation, one of the most compelling benefit of wide spread usage of electric vehicles is their environmental impact. Unlike traditional vehicles that run on internal combustion engines, EVs are powered by electricity stored in batteries, which means they produce zero emissions. This can significantly reduce air pollution, particularly in urban areas like Lagos, Port Harcourt, Abuja and the likes where traffic congestion and poor air quality are major concerns.

By shifting from gasoline(fuel) to electricity, EVs can help reduce the number of harmful gases, such as carbon dioxide (CO2), nitrogen oxides (NOx), and particulate matter, which are linked to health challenges and serios climate change. Emissions, primarily carbon dioxide is a key driver of climate change. The gas is usually trap heat in the atmosphere gradually warming up the planet and causing intense heat wave and disruption of the ecosystems.

So, to reduce the emissions of CO2 from combustion engines, working by burning fuel and overheating with high engine noise, electric vehicles are desirable. Because they more energy-efficient compared to their gasoline-powered counterparts, more so, EVs are with less maintenance culture and repair expectations are low.

In fact, EVs are more cost-effective in the long run, despite high initial purchase price because over time the operational costs of running are lower. Believe it or not, EVs have fewer moving parts compared to conventional cars, where there is no need for oil changes, oil filters and radiator or coolants.

In fact, the brake systems tend to last longer because of regenerative braking technology, a feature common in many electric vehicles. The cost of electricity for charging is also typically lower than the cost of the usual fuel or diesel, further reducing the lifetime costs of owning an EV.

With all the aforementioned the future of electric vehicles looks promising but technological advancements in battery storage, such as solid-state batteries and faster-charging technologies, are expected to improve to enhance the overall EVs performance, its affordability, and convenience.

As the global demand for clean energy grows globally, it is the hope of the author that governments in Africa in particular Nigeria will step up their efforts to encourage the adoption of electric vehicles. Though effort on Compressed Natural Gas (CNG) promotion is high in Nigeria in recent times which is a clear alternative to high cost of fuel currently but the real global standard and future of transportation is electric.

Many countries have now introduced stricter emissions regulations, offering financial incentives such as tax credits, rebates, and subsidies to make EVs more accessible to consumers Nigeria should not be an exemption, our government can also initiate similar policies.

Additionally, several governments have set ambitious goals to phase out the sale of new gasoline and diesel vehicles in favor of zero-emission models EVs within the next few decades, Africa can also start promoting this.

In addition, businesses and investments drive can be channeled into this developing critical area. Such as investment in home charging solutions, public charging infrastructure,wide spread charging stations, encouraging car manufacturers and private companies to set up assembling plants in Africa countries.

Investing inhome charging solutions, will make it easier for individuals to charge their vehicles overnight. Theseinvestment options and widespread infrastructure will help reduce range anxiety and make electric vehicles a more viable option for everyday consumers in Africa.

While challenges such as charging infrastructure, battery costs, and range limitations remain, ongoing advancements in technology, along with supportive policies and growing consumer demand, are driving the transition toward a cleaner, more sustainable transportation systemthios can also happen in Africa.

As electric vehicles become more affordable and accessible, they have the potential to significantly reduce our reliance on fossil fuels, improve air quality, and create a more sustainable future for generations to come. Good luck!

How may you obtain advice or further information on the article? 

Dr Timi Olubiyi, an Entrepreneurship & Business Management expert with a PhD in Business Administration from Babcock University, Nigeria. A prolific investment coach, adviser, author, columnist, seasoned scholar, Member of the Institute of Directors, Chartered Member of the Chartered Institute for Securities & Investment (CISI), and Securities & Exchange Commission (SEC) registered capital market operator. He can be reached on the Twitter handle @drtimiolubiyi and via email: [email protected], for any questions, reactions, and comments.

The opinions expressed in this article are those of the author- Dr Timi Olubiyi and do not necessarily reflect the opinions of others.

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