CONTRIBUTION OF INLAND WATERWAYS TO TRADE AND COMMERCE IN NIGERIA: AN ECONOMETRIC EVALUATION

Abstract

Inland waterways represent a strategic asset for trade facilitation and commercial development in Nigeria, yet the sector remains significantly underutilized. This study evaluates the contribution of inland waterways to trade and commerce in Nigeria from 2000 to 2024. Using an ex-post facto research design, the study employs secondary time series data from the Central Bank of Nigeria, the National Bureau of Statistics, and the Nigerian Inland Waterways Authority. Ordinary Least Squares regression and cointegration tests are applied to examine relationships between cargo throughput, trade-to-GDP ratio, and economic performance. The theoretical framework draws on New Economic Geography, Global Trade and Supply Chain Theory, and Hub-and-Spoke Theory. Findings reveal that cargo throughput has a statistically significant positive effect on trade performance, with the model explaining 94.7% of GDP variation. The current utilization of Nigeria's inland waterways is around 30% of capacity, with yearly throughput of 80 to 120 million tonnes, translating to an estimated N500 billion to N1 trillion economic value. The study estimates that optimizing the inland waterways sector could generate N10–N12 trillion annually, create 2–3 million jobs, and add 15–20% to non-oil GDP. The study rejects the null hypothesis, establishing that inland waterways significantly contribute to trade and commerce. Recommendations include development of river ports, enhancement of intermodal connectivity, promotion of barge transportation, and export diversification policies.