Annals of the Social Science Academy of Nigeria 1(1) 1997 DOI: 10.36108/ssan/7991.09.0130
THE DETERMINANTS OF THE FINANCIAL PERFORMANCE OF A PUBLIC TRANSPORT ENTERPRISE: THE CASE OF THE NIGERIAN RAILWAY CORPORATION, 1960-1991
John C. Anyanwu
Dept. of Economics and Statistics, University of Benin, Benin City, Nigeria
Abstract
This article estimates and analyzes the determinants of the financial performance of a public transport enterprises – the Nigerian Rail-way Corporation – whose performance has been a cause for concern for successive governments in Nigeria. The analysis spans the period from political independence (1960) to 1991. Our analysis indicates that higher traffic volume and pricing factors leading to greater economies of scale are associated-with improved financial performance. However, inflation and exchange rate adversely affect the railway’s financial performance. While national income negatively influences the enterprise ‘s revenues, it positively affects its revenue per naira of cost. In addition, the life-cycle hypothesis is strongly rejected. Another troubling finding is that deregulation negatively affects the railway’s financial performance. The results, therefore, indicate that Nigeria’s deregulation policy is not only incomplete but also ineffective. Consequently, we recommend “corporatization” of the railway and reshaping towards lines-of-business..