Transportation Business in Nigeria is often seen as a lucrative business by many and this notion is the major reason why it is difficult to succeed in this business in Nigeria. I have tried delving into the transport business with a tricycle as well as a Mini bus (Ford Galaxy) but I came across these challenges that made it difficult to succeed in transport business and some of these challenges are similar in other businesses. The government has been trying to make it easy doing business in Nigeria that is why they are making efforts towards the Ease of doing business in Nigeria a policy that I would say have not made any impact in carrying out business in Nigeria. By the way, I used a ford galaxy which carries 8 passengers (Max) from Abuja to Jos, Plateau state.
Table of Contents
- Challenges and Difficulties of Transport Business in Nigeria
- A quick Analysis of the Profit and Expenses for Transportation of 8 Passengers from Abuja to Jos (Plateau)
Challenges and Difficulties of Transport Business in Nigeria
These are the challenges I encountered and when surmounted, only then can one succeed in the transport business in Nigeria.
Though it is not a good business strategy to just allow your business to be managed by someone with the hope that the person will be honest; I have come to realize that virtually all the drivers employed to be driving are dishonest. Not only are they dishonest but they do everything within their power or wisdom to gain from you and from the car without thinking of how sustainable that may be. In their nave minds, you have a job that brings money every month and you can keep supplying money even if you dont benefit from it.
You will buy an almost new car and give to a driver with all the car papers intact and everything in place, only to start having one complaint to another that drives you into giving up. The driver may sell your car tyre and then turn back to complain that the other one developed a problem while on the way and he had to change it.
Another complaint will be that while on the road, the customs stopped him on the way and demanded for customs paper and he had to pay a certain amount before he was allowed to go.
When you give the car as hire purchase, the driver is responsible for maintenance and for repairs but instead of carrying out the maintenance when it is due, he will not and then you will get a call one day that the engine of the car has a problem; when you ask why, the mechanic will tell you that it was because the car was not serviced in time, but the same driver will swear heaven and earth that he did the servicing. What I realize is that, instead of servicing the car, he will spend the money and then hopes the car continues since it is not his property.
Another issue is the poor attitude towards driving, whereby the driver drives carelessly without thinking of the impact on the car; over speeding leading to wheels developing problems because the car keeps bumping into bumps and potholes.
The above issue of drivers causes you to keep spending without getting any returns and a business that does not bring money will certainly fail.
The federal as well as state roads in Nigeria are absolutely very bad that sometimes your farmland is even better than some Nigerian roads. If you are not conversant with plying the roads, you may end up in a ditch or in a river because you may find some bridges almost dividing into two but cars are still managing to pass through the bridge; a condition where you see bridges have large potholes without anyone caring to repair the bridge one wonders what the use of FERMA is.
The Poor road can cause accidents of which most accidents are caused as a result of this. Another problem of poor road is the frequent repairs of shock absorbers, wheels and replacement of tyres which all require money.
Frustration from Government Enforcement agents
Because everyone thinks you are making money with your bus or mini bus, the law enforcement agents such as FRSC, VIO, Police and Soldiers are making every effort to extort money from you. And since they are there on daily basis, when you refuse to give, they look for every possible way to frustrate you by asking you to park and checking every passengers luggage just to waste your time. Any law enforcement agent you meet needs something from you ranging from 100 naira to 200 naira. For a journey from Abuja to Plateau state, you may meet about 8 to 10 of such and each expecting something from you, how much will you then make as profit?
Kidnapping and Robbery
Another issue experienced is the issue of kidnapping and arm robbery. Even with the security agents on the roads, there are still cases of kidnapping and arm robbery happening virtually every day. This is so serious that even politicians have resorted to using high speed trains instead of using their cars for the fear of being kidnapped. This is an issue along Kaduna to Abuja road. Imagine your driver gets kidnapped with the passengers, who gets to pay for their release?
There are many cars into the same business as you. If you are loading passengers from the park (which is the only way to monitor the driver, because of the fixed transport fare and the fact that your car has to be filled up before leaving the park), the number of cars waiting on the queue can be discouraging. Imagine your car being the number 33 on the queue and the maximum number of cars that move per day may just be 25. This means you have to cancel that day and wait for another day or you follow the road hoping to get passengers on the road. When you pick passengers on the road, there is no guarantee of getting the maximum number and you can be arrested by NURTW touts who are like vultures waiting to eat from you at the slightest opportunity. Moreover, when your driver picks on the way, you are at the mercy of the driver because even when he gets 8 passengers, he may tell you he got only 6 or 5 which means you cannot monitor him.
Extortion from Road Transport Unions
Whenever you load in a park, there are unions demanding money for loading which often is the amount of a single passenger, then you need to pay for gate fee of about 100 naira and then registration fees which could be 10,000. This makes the union agents the people gaining from your hard work. You buy a car, register, get a driver and then all they do for you is to load the luggage and passengers into the car and then the collect 1500 from every car. You are then left with the risk of transportation, fueling the car, and making sure you transport the passengers. The Union bodies have no benefit to you whatsoever. They are just after collecting the money.
Repairs of Car and Maintenance
Imagine going for 2 months without making profit but using your personal money to be making the repairs. I will come to this later when making the cost analysis and the profits. When you service the car and make some minor repairs, the whole money is gone and you are left with nothing.
Lack of Insurance Cover
From the little amount of money you make, how much can you pay as insurance in order to help reduce unforeseen circumstances such as accidents? Will you pay 100,000 naira every year which your annual profit may be a little above this? Or you may keep the money and hope nothing bad happens? What if something bad happens and you have to pay and you have no more money to continue the business?
A quick Analysis of the Profit and Expenses for Transportation of 8 Passengers from Abuja to Jos (Plateau)
- At the Park 8 passengers at the park pay 1,300 naira each = 10,4000
- Fueling of car from Abuja to Jos for Ford Galaxy is about 4500 naira
- Union fee per loading of car is 1500 naira
- Keep like 800 naira for possible prevention of harassment by law enforcement agents (a form of corruption where they feed on you)
10400 4500 1500 800 = 3600 naira (This is your profit per day)
When using the park, it is not possible to make two trips per day that is a fact, we have tried several times to make it and the day we did, we reached very late at night and we changed one tyre and repaired a broken rim because of how we were bumping into potholes in the night.
Servicing of the car: 4500 for engine oil and 700 naira for oil filter and 500 for workmanship. You need to service the car like every 3 weeks.
How much will you pay the Driver? We wanted paying 15,000 or 20,000.
The driver will rest on Sundays and work for 6 days.
Some questions to ponder on
Transportation business is very difficult to succeed in it especially for those starting small. It is better you start with 6 buses where you can have your own park and register the company and then be left with sourcing and advertising for people to know about your company. But the problem is, where will you get the money to start big like that? And when you have that amount of money, will you gamble it on such a business with the poor road networks, robbery, kidnapping and risk?
- The question now is how will you overcome these challenges?
- Will you make repairs yourself or you leave the car at the mercy of the driver with the hope that he will make repairs?
- Will you register at the park or you will follow the road?
- Will you drive it yourself? Then how can you scale the business?
- When will the roads be good?
Dr. Brown is the founder of Jotscroll, he is a Medical Doctor, Entrepreneur, and author. Dr. Razi Brown holds a medical degree from the University of San Diego. He has invested in many startups and is currently working on his fifth book to be published in the upcoming year.