Journal of Economics and Trade

Abstract

This paper examines the effects of road and rail transport system on economic growth of Nigeria. The empirical analysis and findings from a Multiple Ordinary Least Square (MOLS) model revealed that though road transport had significant positive effects on economic activities, the low level of rail transport significantly suppressed the overall contribution of land transport and the smooth flow of goods and passengers in Nigeria. Consequently, the low level of rail system has reduced the overall impact of transport sector on the growth of Nigerian economy, while government transport infrastructure investment enhanced the economic growth. The study concluded that the neglect of rail system had overstressed the road transport and hence destroyed the possible complementary benefits from the two transport system. Therefore, increasing government investment in rail transport sector will not only augment the overall economic productivity but also enhance the complementary contributions of both rail and road transport system in Nigeria.