Air Transportation and the Nigerian Economy
CHAPTER ONE
Objective of the study
The main objective of the study is to determine the effect of air transportation and the Nigerian economy. The specific objectives of the study are;
- To determine the impact of air transport sector on the Nigeria economy
- To know the influences of air transportation in developing countries
- To get the aggregate level of the waste caused by poor air transportation system in the Nigerian economy
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Conceptual framework
Concept of air transportation
Air transportation is one of the most important components of the world’s transportation system. Not only does it provide the major means of long-distance travel in the world, but its economic impacts on global and national economies is substantial In addition, because of the very nature of aviation infrastructure (for example, airports) and the current technology for flight (for example, jet engines that consume fuel and emit air pollutants), air transportation plays an important role in efforts to improve environmental quality and promote sustainable development. The major components of the air transportation system include airports, air traffic control systems, aircraft, and airlines. Changes in each of these components will have important consequences for the future of the aviation industry. For example, significant airside congestion is occurring at some of the world’s largest airports. How can additional capacity be provided in an environment where major infrastructure investment is constrained? Technological advances are preparing for a major shift in air traffic control away from ground-based aircraft guidance to satellite navigation systems that allow aircraft to fly their own routes. One of the major trends in air transportation over the past 80 years has been ever increasing aircraft size and weight. If aircraft continue to get bigger, what will this do to airport capacity and environmental impacts? And finally, in a deregulated market environment, the airline industry is extremely volatile, with market conditions significantly affecting the viability of air service and the profitability of some airlines around the world
Concept of Nigeria economy
The Economy of Nigeria is a middle-income, mixed economy and emerging market, with expanding manufacturing, financial, service, communications, technology, and entertainment sectors. It is ranked as the 27th-largest economy in the world in terms of nominal GDP, and the 24th-largest in terms of purchasing power parity and the largest Sub Saharan Africa’s
economy. Nigeria has the largest economy in Africa. The country’s re-emergent manufacturing sector became the largest on the continent in 2013, and it produces a large proportion of goods and services for the region of West Africa. In addition, the debt-to-GDP ratio was 16.075% as of 2019.
Nigerian GDP at purchasing power parity (PPP) has almost tripled from $170 billion in 2000 to $451 billion in 2012, though estimates of the size of the informal sector (which is not included in official figures) put the actual numbers closer to $630 billion. Subsequently, the GDP per capita doubled from $1400 per person in 2000 to an estimated $2,800 per person in 2012. Again, with the inclusion of the informal sector, it is estimated that GDP per capita hovers around $3,900 per person. The country’s population increased from 120 million in 2000 to 160 million in 2010. The GDP figures were to be revised upwards by as much as 80% when metrics were to be recalculated after the rebasing of its economy in April 2014.
Although oil revenues contributed 2/3 of state revenues, oil only contributes about 9% to the GDP. Nigeria produces only about 2.7% of the world’s oil supply. Although the petroleum sector is important, as government revenues still heavily rely on this sector, it remains a small part of the country’s overall economy.
CHAPTER THREE
RESEARCH METHODOLOGY
Economic theory is always allowed to be used in suggesting the method on which every economic research is conducted. Methodology includes the specification of models, the estimation procedures, the data requirement and sources for each hypothesis testing as well as the techniques of data analysis also theoretical and statistical alternative methods amongst other.
Statistical method deals with the generation of empirical data, evaluation and approval of these data, and attempts to describe the pattern of their development over time. (Amundu 2008).
In the study, the econometric method will be used to obtain the numerical estimates of co-efficient of the variables. This is because it provides numerical values for the co-efficient of the relationship among economic variables and the extent to which the variables impacts on one another. The economic method of evaluation provides interdependence of the economic variables. For example, the economic method provides that the level of GDP output of a country (Nigeria) depends on the accessibility of the transportation, inflate rate and income distribution and other variables which might be known or unknown but are not included in the model (error term). (Koutsoyiunis, 1993)
MODEL SPECIFICATION
This is showing the mathematical and economic relationship that exists between the dependent and independent variables. Koutsoyiannis (1997,122) stressed the importance of expressing the relationship under study in mathematical form. This is to specify the model by which the economic phenomenon will be employed empirically.
CHAPTER FOUR
RESULT PRESENTATION AND ANALYSIS
The result of model was established using the OLS (ordinary lest square) method. P (Give 8.0) software package was used to estimate the various statistical and econometric test. After which on in – depth analysis was made on the result generated from the regression. The model was estimated with four variables which include Gross Domestic Product, Transportation, Inflation and Manufacturing Output.
EVALUATION OF RESULT
EVALUATION BASED ON ECONOMIC CRITERIA
From the result the transportation has a positive relationship with the GDP and a unit change brings about 37.835 increases in GDP. The manufacturing out has also a positive relationship with the GDP and a unit change brings about 1.3739 increases in GDP. While Inflation also has a positive relationship with GDP and a unit increase in inflation brings about 60.6% increases in GDP.
CHAPTER FIVE
SUMMARY, POLICY RECOMMENDATION AND CONCLUSION
SUMMARY
The research has specified and estimated a model on the empirical evaluation of the air transportation system on the development of the Nigerian economy.
Our model was specified to capture the impact of air transportation on the development of our economy.
The model used Gross Domestic Product as the dependent variable while air transportation. Inflation and manufacturing output were the independent variable used.
The result shows that air transportation and manufacturing output had a positive impact on the economy of Nigeria.
OLS method was used in estimating the model and PC give 8.0 software package was used.
Based on the result it was found that the independent variable explains 98% of the variable in the transportation system.
POLICY RECOMMENDATION
- In order to allow the air transportation sector to deliver their services efficiently, the government should allow the sector to take decisions without interference from the government.
- The government should provide training and manpower development in order to get effective functions or performance and over all efficiently depending greatly on the equality and caliber of staff controlling the transport output.
- The government should setup air transport equipment workshop and mobile workshop to minimize. The problem of breakdown of realities on operational services.
- The impact of transportation in the economy also contributes to the economy by providing millions of jobs through the process of economic youth. It allows men and women to earn their living by manufacturing vehicles and by driving, manufacturing and regulating them to allow safe and efficient movement of goods and people.
CONCLUSION
It is observed from this study, that the government has positively affected the air transportation system and in return, the air transportation system has impacted positively on the economic development of the country by providing employment for the teaming population of the country and also securing the citizens, ensuring movement of people and goods from places.
The manufacturing output of real sector has benefited positively from the transportation sector of the country. In general the transportation system has a positive impact on economic growth and development of the country.
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