Logistic Management and Transportation Security in Northern Nigeria

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HE1−9990 UDC: 338. 1
Gambiyo Suleiman PUROKAYO
School of Economics, Finance and Banking (SEFB), University Utara,
Kedah, Malaysia
suleimangambiyo@gmail. com
Logistic Management and Transportation Security in Northern Nigeria
Working of transportation system depends on characteristics and peculiarities of economy, including security concerns, which is foremost in Africa. The primary objective of the study is to assess accessibility constraints in Nigeria’s Northeast region. Road transport is the most pervasive of all transport modes in Africa and is central for growth of the sub region. Road networks and terrain amongst others estimated showed that terrain have been one of the constraints in achieving the objectives of an efficient transportation. Some gains in road network in some locations had been eroded by increased insurgency and crisis in most locations. This has resulted in shortfalls of supply of goods within countries in the region, thus affecting their economies. We recommend that the root cause for increased insurgency and crisis, which may be due to implementation of various economic policies in Africa and increase inequality, corruption and lack of functional/truncated democracies, should be addressed. The working of African economic cooperation like ECOWAS should be strengthened and implemented. key words: transport security, accessibility, logistics, border trade.
Transport economics is concerned with various aspects of the transportation system. It covers choice of roads and users, various goods (types of modes), induced demand for transport types, cost minimization of types of routes and modes. The transportation system follows demand and supply theories. Increase in population and growth of new cities, costs of congestions (urban sprawl), logistics management, generalized cost of travel, dynamics in networks and others aspects, all results in changes. These had introduced sophistication in theory and measurements used in transportation models. Transport economists are interested in the economic problems of moving goods and people (Button, L., 2010). Transport has long been recognized as an important determinant in the location of economic activity, and therefore, a policy instrument for economic development (Lane, 2014). Greene and Hensher (2013), on the other hand, examined various aspects of demand for transport, especially the dimensions of heterogeneity of individuals in the demand for transport for various levels of activity. Generally, working of transportation system depends on characteristics and peculiarities of economy, including security concerns, which is foremost in Africa.
Logistics management in this study is not defined strictly as the processes of inventory control, determination of various stages required for goods to reach the final delivery, but transportation of goods across the border, considering various routes choice in the delivery of goods to the desired destination. It may not strictly relate to outsourcing decisions. It involves planning which route, period required, high risks and uncertainties to reach the desired destination. However, transportation on most routes along the northern corridors — the Niger-Nigeria, Chad borders, Cameroun borders and the famous Nigeria-Cotonou borders have high traffics, and require a wide range of logistic decisions. Various literature (Fadahunsi & amp- Rosa, 2002-Mam-man, 2005- Ogunbodede, Ilesanmi, & amp- Olurankinse, 2010) opined that movements (traffic) on legal and illegal routes had increased levels of insecurity in some towns in North-East and that resulting in unsafe transport. It is also observed by the National Working Group on Armed Violence (NWGAV), in cooperation with Action on Armed Violence (AOAV), a London-based charity found that Nigeria’s North East roads are the most violent in Nigeria, NWGAV & amp- AOAV, (2013). This trend has affected the flow of goods across these borders. Questions on the logistic management have been reduced to safety issues with high cost of transport. It is riskier in the North east region compared to Somali pirates attacks along busy shipping lanes that are crucial for the transport of goods various locations.
The objective of this study is to assess accessibility constraints in terms of transport security of goods and people along border routes in Northeastern international corridors. Nigeria has borders with Cameroon, Niger, Chad and the Republic of Benin both in the northern and southern regions of Nigeria. Nigeria has common important international corridors with these countries, apart from its regional groupings like the African Union (AU), which was established in 1963 (OAU) and 2001 (AU), Economic Community of West African States (ECOWAS) in 1975, New Partnership for Africa’s Development (NEPAD) in 2001 and African Growth and Opportunity Act (AGOA), an initiative launched in 2000 and signed into law in 2001 by the US congress to increase exports and growth of economies of Africa. The most important aspect of this cooperation is to strengthen movement across common borders.
The growth of insecurity along these borders has been a major concern for trade. This trend have resulted to reduced trade flows across borders and leading countries to readjust, reallocate spending to make room for security as the case in Nigeria with the multinational force along the northeast region. Most trade hubs in Maiduguri (northeast) and the far North (Kano, Sokoto) have been affected. The overall objective of the cross-border trade assessment was to gain improved flow of goods amongst others, to strengthen the ECOWAS charter and the common goals of the African Union. It has, however, introduced travel constraints, increased cost of transactions and affected welfare for communities (growing refugees) along these locations.
Efficient freight logistics play an important role in achieving social-economic and environmental sustainability by enhancing an optimal integration of different modes or routes. It provides an efficient and cost-effective use of the transport system. It is vital in achieving transportation of goods to desired distribution locations. An efficient logistics centre structure, in terms of storage and security on various routes, may lead to a significant profit
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and returns on investment as well as a significantly increased competitive advantage in the market place. Meeting strategic commercial objectives is important in the determination of location is a key factor in enhancing the efficiency of such transport facility. Achieving this objective depend on types of roads and security in various countries. According to Hausman, Lee and Subramanian (2005), these variations in time and cost across countries stem from differences in quality and cost of infrastructure services as well as differences in policies, procedures and institutions.
Transport policies in Nigeria are tied to 2010 transport policy and Millennium Development goals (MDGs). The goals of the Nigerian transport policy cover five main areas and support MDGs, (i). Safe transport system is safety standards overseen by road safety agencies in Nigeria, Federal Maintenance Agency (FERMA), and the Federal Road Safety Corps (FRSC), (ii). Environmentally sound transport system is to check pollution and road conditions (iii). Efficient transport system is based on resources and technology, (iv). Affordable transport system is such prices that all classes can afford (equality issues) and, (v). Integrated transport system is efficient connectivity. These desired conditions in the transport policy have not been attained mainly due to fiscal constraints and security concerns. A study undertaken by an independent body, Ibukun Edu, 20 131, from May 7 to May 9, with 1,002 randomly picked Nigerians of legal age (& gt- 18), across the six geopolitical zones, shows that 71 percent of Nigerians believe that Nigerian roads are unsafe. Lack of safety on roads has made transporters to increase insurance premiums and cost of transportation (see IRIN report, 2004, http: //www. irinnews. org) which affects the sub-Saharan region. Low budgetary allocations to roads have affected maintenance and the stock of roads. Rioja (2001) noted that lack of maintenance leads to road deterioration and affects productivity in agriculture sector and general price rise.
Other aspects that affect the realization of the Nigerian transport policy are issues of public private partnership in road maintenance and new roads. Partnering with the private sector in road building is still very low according to the Sub-Saharan Africa Transportation Policy report (Small and Runji, 2014), expenditure on large infrastructure (roads) is solely financed through public finance.
Many empirical studies have examined the effects of transport costs on trade flows. Limao and Venables (2001), found a robust statistical link between transport costs and international trade flows. This may be related to quality of infrastructure — in terms of achieving connectivity and reduction in travel time, which all add-up to transport costs. Other studies find that differences in logistics performance are driven only in part by poor quality of physical infrastructure services such as road, rail, and waterways, port services (Subramanian and Arnold 2001). In the case of entry points in the Northeast of Nigeria, inadequacies often occur due to porous border policy and institutional constraints-such as inadequate enforcement of contracts, poor definition and enforcement of rules of engagement, delays in customs, delays at ports and border crossings. Inadequate enforcement of contracts is argued by the World Bank doing business report 2012−2014 to have affected road projects. Important features related to our study are (i). Trading across the borders — weak border controls and conflict occurring in border towns (Boko Haram, Al-Oaida in the Magrib, Alshabab, etc) that affects trade, and (ii). Weak enforcement of contracts (including road building and Maintenance) due to corruption, have affected the quality of road projects amongst others. Importantly, roads in the Northeast of Nigeria are amongst the most neglected roads in Nigeria (Alaba Adetola, 2011).
Thus trade and related economic activity in these locations have affected economies of this region over time. According to the Famine warning System Network (FEWS NET) — (USAID Report, 2013), the state of affairs is:
«Due to intensifying civil insecurity, a state of emergency has been declared for north-eastern Nigeria. This had lead to additional fatalities, population displacements and disruptions to market, trade and income generating activities. «
Movement of goods, people and other services in this region has been restricted. Flow of goods and services have increasingly shown price differentials due to difficulty of access, especially transport of goods from the border countries — Niger, Chad, Cameroon and Nigeria. The underground economy had been successful due to increased smuggling since the times of the trans-Saharan trade route. This has however had been reduced in the present times due to increased crisis in the northeast region.
Data and Methodology
Data requirement for this study is from primary source. The objective is to assess accessibility and related issues, two main locations were used in collecting data. Adamawa state axis — from traders in the state capital (Yola) who trade in familiar products in Yola market like (Cameroun soap, perfumes, cooking oil, milk etc) and prices. Other locations where questionnaires are administered includes central Adamawa (including the capital), northern Adamawa (Mubi and Madagali and parts of Borno state, Appendix I, Figure 1. 2). In Gombe state includes Gombe-Biu locations (see map in appendix I, Figure 1. 1). The Gombe-Biu locations are relevant because goods from Cameroun, Niger are available in most markets. Total questionnaire administered is 1000, 612 questionnaires returned. This forms the data used. Possible routes are shown on Table 3. 1
Method of data analysis is multinomial logit model. Multinomial logit models are used to show relationships between polytomous (more than two distinct categories) response variable and a set of regressor variables. The discrete choice (which includes discrete models), according to Long (1997) is based on the individual’s choice of outcomes that maximizes the utility gained from the choice.
The environment of this study is based on the fact that there are numerous roads. The individual consumer chooses from an array of routes that minimises his travel risks. The multinomial logit (MNL) model is widely used in discrete choice models due to its closed-form choice probabilities and its consistency with the random utility maximization (RUM).
The probabilities that an individual will choose an alternative j given by explanatory variable is:
Pr (y, w=_seu*_
1+Ifj=2exp (xtlij)
Pr 0*i| x, i = [(exp ()3. (0. j)+)3t (l. j) xu)])/(?*0'-=l), 4 [(exp (/?*(0. j)+)3*(l. j) x*i)])
Where xi is a 1 x (kx+1) matrix of explanatory variables including the elements to model the intercept, is a (k+1) dimensional parameter ved^T) which is the multinomial logit model (MNLM). The need to use these models is due to the nature of data and analysis. The use of the multinomial logit model is done to evaluate accessibility of transport and security arising from utility maximizing behaviour of individuals in choosing from a choice set of alternative travel routes in northern Nigeria, especially in the location of the study area. MNL expresses the probability that a particular option chosen is the exponent of the utility of the chosen option divided by the exponent of the sum of all alternatives chosen. When logistic regression is calculated, the regression coefficient is the estimated increase in the log odds of the outcome per unit increase in the value of the exposure (Szumilas, 2010). Interpreting logit regression, we exponentiate the coefficient which will give us the odds ratio (Bierens, 2008- Buis, 2010).
1 Ibukun Edu (2013) — Http: // telegraphing. com
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Table 3. 1
Entry Points and Cross-Border Activities
Nigerian entry Point (State) Route from Nigerian axis Targeted entry Point (Country) Economic acivity at entry point
Borno State Damasak -Diffa NigerRepbublic Jewellery, Hand crafts, food, cloths etc
Borno State Jilbe Chad Repbublic Agricultural goods.
Borno State Baga Chad Republic Fishing in Lake Chad, trade in agricultural goods.
Borno State Banki Cameroun Foreign exchange Centre, manufactured goods from both countries.
Borno State Mandara Mt: (from the North), Gwoza-Kerawa* Cameroun Goods (including small fire) (Base camp for Boko Haram exit routes from countries within the locations)
Adamawa State Mandara Mts (from the South), Madagali-Michika Cameroun (exit to Chad through bush paths) Agricultural goods, manufactured goods (including small fire arms)
Adamawa State Gurin (fromYola central axis) Cameroun Various goods (including medical consultations in Cameroun)
* The most important fotress (stronghod) for Boko Haram hold-out.
• there are more than 1497 illegal routes around these locations and the stronghold of Boko Haram (strenghtened by high immigrants inflow).
Source: authours survey and compilations.
In this study however, we are interested in observing changes in conditions- worsening of the terrain (by changing weather or when insurgency covers a wide locations) which may affect transport, or the ability to connect (network of road connectivity) some routes as shown in Table 3.1 — always monitoring which routes are perceived risk-free. Therefore we will use the multinomial marginal effect to observe such changes. We will show that the marginal effects (ME). We estimate firstly the effect of change as a result of a unit change, defined as:
-^ = Pv (PrPi)
Where the estimated $ = is the probability of weighted average of and the marginal effects vary with the point of computation of any one predictor because Pij varies with the predictor (xi), the marginal effect is positive if & gt- f}i. Thus, is the marginal change in log odds with respect to Xi. We formulate a simple linear equation of our model: Yi=j}0+fiX 1^ 2×2+… +P kx k + U, Y= transport choice x 1-x 4, while define the predictors (location choice, Network roads, terrain, and transport price respectively). Efficient transport choice is defined by initial choice of a location- it depends on type of networks of roads available. Choices also are defined by the terrain and transport price. All this affects travel time and cost which creates price differentials for this region compared with other regions in Nigeria.
Results and Discussions
Given that transport choice is our main concern, four predictors — location choice, Network roads, terrain and transport price as the predictors. The multinomial logit marginal gives the following results (Table 4. 1)
Examining the results in Table 4.1 shows that for location choices — the site of economic activities here is used as a location where a commuter starts a journey. Sometimes it is used to show the importance of residential choice on decisions for transport location choice. Location choice is not significant. The important issue is how it navigates through various routes to its desired location. Also, transport price (cost of available transport mode) is cost of movements from one point to another. In most of the locations, given the degree of security, goods are moved from one location using various transports — animals, trucks, on foot through mountains and motor bikes (see Figure 1. 2). It shows however that it is not significant because this is argued on the basis that most regular transportation is seldom used, except of course from some locations with visible security (state capitals). For instance, a route from Madagali (Adamawa state), pathways are visible with footmen conveying agricultural goods and sometimes large movements of animals (cattle, sheep etc) smuggled through dark alleys to Cameroun, Niger or other destinations. It is also believe that through such routes small arms are imported into countries in the region.
Table 4. 1
Marginal Effects of Outcome Probabilities for Choice of Routes.
Explanatory Variables Borno State Routes P-Value Adamawa State Routes P-Value
(Ay/Ax) (Ay/Ax)
Location Choice. 0367 (. 0258) 0. 155 -. 0329 (. 0236) 0. 164
Network roads. 1783*** (. 539) 0. 001 -. 0346 (. 0508) 0. 496
Terrain roads. 0476** (. 0229) 0. 038 -. 0800*** (. 235) 0. 001
Transport price -. 0158 (. 0110) 0. 150. 0062 (. 0100) 0. 538
• Standard Error in parentheses
• p& lt-0. 1, ** p& lt-0. 05, *** p& lt-0. 001 Sources: Survey
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Network roads (ability to connect available roads) a one unit change in the probability by individuals to choose routes around Borno state (routes to Cameroun or Chad). This means that individuals are able to access their preferred roads (as in table 4. 1). The significance of network of roads with an outcome (0. 1783***) indicates that a one unit change in kilometres such that an increase by 0. 1783 results, means that the probability of any individual to access networks in a preferred (defined by degree of risks) location increased. Higher probability of access allows individuals to make decisions that allow them to change their travel behaviour. Option in Adamawa state may not be available due to limitation of connectivity. From Table 3. 2, options for different routes access seem to have a flexible choice set in Borno axis. This may be argued that movements around trade routes in Borno (Maiduguri) are higher due to proximity to economic activities in Lake Chad and other products routes than in Adamawa state axis. However with the increased in crisis, gains in connectivity was narrowed, even though routes in Adamawa did not replace lost Borno routes. This has affected variety of goods to border towns. Another augments for fall in the supply of goods to these locations is the fact only foot paths and use of animals seem secure way of transporting goods across the difficult roads.
For Terrain roads (constraints due to long unmaintained roads, increase desert conditions and increase insecurity) has affected travel time and cost. Estimates in Table 3.1 show that a unit changes in the terrain, increases by 0. 0476 the probability of travel time due to road conditions or risks as a result of longer travel time required at any time affects roads. Increase in the probability means that the likelihood or chances of accessing routes becomes lower with each increase. Changes may be small, due to long lack of maintenance and the fact that part of their budgets (Northeast) is used for security maintenance since 2009 due to the state of emergency. These changes are significant (5 percent), it may be because vital road connection (a bridge) that links location collapsed due to high rainfall, a supply route that goes a location that is crises-ridden or goes through insurgents location. This has affected transportation in this region. However, in Adamawa (Table 3. 1), that a unit changes in the terrain, decrease by -0. 8000***, and significant. This means that improvement in the terrain has improved access. The perception of respondents is overwhelmed by the increased in crises which had meant that most routes seemed 'unmotorable'. For instance the only route to Maiduguri is from Gombe-Yobe the Borno instead of a straight journey, Adamawa-Borno (Maiduguri) (see Table 3. 1). Improvements also are to allow transportation to border towns, which by the current trends- Adamawa seems to be the 'safe' routes when compared to routes from Gwoza-Kerawa to avaialbe supply routes. This route is the most dangerous route in the region because insurgents use this location because is a mountainous terrain.
Conclusion and Policy Recommendations
Various networks of roads and different terrain in Northeast have shown some increase in access for various road connections. Types of terrains in the Northeast regions have affected transportation in various locations. Gains in Adamawa and Borno location is eroded due to increased insurgency which connected to porous borders in the region. Increased conditions in the sub-Saharan region had caused increased inflow of migrations in the region — from the Libyan conflicts, insurgency in Mali and most of North Africa, famine in Chad and Niger and other regions. Armed conflicts — al-Oaida, Boko Haram and other conflicts in the region, have affected road transport. Road transport is the most pervasive of all transport modes in Africa and is central to the socio-economic growth and development of all countries in the region (Pinard, 2015). Logistic managements have been the most difficult decisions in this region due to increased uncertainty in the distribution of goods in the region. We recommend that the root cause for increased insurgency and crisis, which may be due to implementation of various economic policies in Africa and the increase inequality, corruption and lack of functional/truncated democratises, should be addressed to. Working of African economic cooperation, like ECOWAS, should be strengthened and implemented.
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Niukat. amd ire States
Figure 1. 1
Major Entry Points to Border Towns (Countries). Source: http: //www. puching. com/newsimmigration (Map Modified for This Study by the Current Author)
Figure 1. 2
Bush Paths Through Mandara Mountain at Madagali In Adamawa State, Nigeria. Source: Authours Photos Taken From Dirif (Madagali)
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