Comparative Analysis of Transportation Infrastructure and Third-Party Insurance on Economic Growth in Northern Nigeria: A Cross-Sectional Analysis
DOI:
https://doi.org/10.64229/27f7rk15Keywords:
Transportation, Infrastructure, Insurance, Macroeconomic factors, Economic growth, A cross-section modelAbstract
This study investigated the relationships between socio-economic characteristics, transportation infrastructure, third-party insurance uptake, and economic growth in Northern Nigeria by adopting a quantitative cross-sectional design. Data were collected from Lafia and Dutse through questionnaires and secondary sources from the Central Bank of Nigeria (CBN) Statistical Bulletin and the National Insurance Commission (NAICOM). A total of 136 valid responses were analyzed using descriptive statistics, multiple regression, and Spearman’s rank correlation after normality tests indicated mixed data distribution. The findings showed that socio-economic characteristics had a weak and statistically insignificant relationship with transportation infrastructure, suggesting that infrastructure development is mainly influenced by institutional and structural factors than individual attributes. Conversely, socio-economic variables, particularly age and gender, significantly influenced third-party insurance uptake, with males and younger respondents more likely to purchase insurance. The gross domestic products (GDP) regression model revealed that transportation services significantly contribute to economic growth, although multicollinearity reduced the significance of some predictors. Transportation infrastructure and third-party insurance were also found to operate independently, influencing economic growth through different mechanisms. The study concludes that transportation infrastructure is a stronger driver of economic growth, while insurance uptake is largely shaped by demographic and behavioral factors It recommends that all levels of government should elevate the construction investments in the infrastructural projects. In addition, the policymaker should have adopted broader indicators in order to evaluate transportation performance. Government agencies and operators across all levels should mainly focus on the improvement of road safety, operational efficiency and culture maintenance, traffic management services, and integrating different modes of transport operations. The economic players of transportation namely insurance regulators and companies, transport authorities should have intensified public awareness campaigns. Government agencies that are responsible for road transport and insurance regulatory supervision should have improved the system of monitoring transport operations. Government should have improved transportation logistics, commercial infrastructures and market accessibility that will facilitate and expand internal, and regional trading businesses in Northern Nigeria.
References
[1]Okiche EL. Protection of consumers of transportation services under the motor vehicles (third party insurance) act in Nigeria. The Nigerian Judicial Review, 2013, 11, 19-38.
[2]Thacker S, Adshead D, Morgan G, Crosskey S, Bajpai A, Ceppi P, et al. Infrastructure: Underpinning sustainability development. United Nations Office for Project Services: Copenhagen, Demark, 2018.
[3]Adebosin WG, Salami LA, Saula DT. Investment in road transport infrastructure and economic growth in Nigeria: A vector error correction model approach. Journal of Economics and Allied Research, 2022, 7(2), 81-92.
[4]Kaiser N, Barstow CK. Rural transportation infrastructure in low- and middle- income countries: A review of impacts, implications, and interventions. Sustainability, 2022, 14(4), 2149. DOI: 10.3390/su14042149
[5]Fedderke JW, Bogetic Z. Infrastructure and growth in South Africa: Direct and indirect productivity impacts of 19 infrastructure measures. World Development, 2009, 37(9), 1522-1539. DOI: 10.1016/j.worlddev.2009.01.008
[6]Ebelechukwu AO, Victor OI, Sunday OC, Okoye NJ, Okere W. Transportation infrastructure development and Nigeria’s economy: An empirical investigation. International Journal of Social Science, Technology and Economics Management, 2024, 1(2), 330-338. DOI: 10.59781/RIPI3024
[7]Mannis A. Indicators of sustainable development. Environmental Software and Services GmbH AUSTRIA, 1998.
[8]Adeyemo DL, Ekundayo OA, Onatola SA, Adebayo OA. Motor vehicle (third party) insurance regulation and road traffic liability risk management in Nigeria. JABU International Journal of Social and Management Sciences, 2022, 8(2), 173-186.
[9]Olayinka AI, James BO, Hammed OT, Olayemic OJ, Oyeleye M, Victor OA. Impact of road transportation on economic growth in Oyo state, Nigeria. Journal of Management Sciences, 2024, 61(7), 211-221.
[10]Ajakaiye O, Ncube M. Infrastructure and economic development in Africa: An overview. Journal of Africa Economies, 2010, 19(1), i3-i12. DOI: 10.1093/jae/ejq003
[11]Obayelu AE, Olarewaju TO, Oyelami NL. Effect of rural infrastructure on profitability and productivity of cassava based farms in Odogbolu Local Government, Ogun State, Nigeria. Journal of Agricultural Science, Belgrade, 2014, 59(2), 187-200. DOI: 10.2298/JAS1402187O
[12]Weiss TG, Forsythe DP, Coate RA, Pease K. The United Nations and changing world politics. Westview Press, 2013.
[13]Baba YN, Abdulrahman M. The effect of transport infrastructure development on the socioeconomic wellbeing of Baro residents: A study of Baro inland port in Niger State. Lapai Journal of Economics, 2024, 8(1), 205-213. DOI: 10.4314/lje.v8i1.14
[14]Ke X, Lin JY, Fu C, Wang Y. Transport infrastructure development and economic growth in China: Recent evidence from Dynamic panel system-GMM analysis. Sustainability, 2020, 12(14), 5618. DOI: 10.3390/su12145618
[15]Levinson D, Liu H, Garrison W, Danczyk A, Corbett M, Dixon K. Fundamentals of transportation. Wikipedia, 2010.
[16]Central Bank of Nigeria. Data and Statistics, 2023. Available from https://www.cbn.gov.ng/rates/: 19 October 2025.
[17]Apere TO. Marketing motor insurance policy and economic growth in Nigeria. EBSU Journal of Social Sciences and Humanities, 2024, 14(1), 109-118.
[18]Ebelechukwu AO, Victor OI, Sunday OC, John ON, Wisdom O. Transportation infrastructure development and Nigeria’s economy: An empirical investigation. International Journal of Social Science, Technology and Economics Management, 2024, 1(2), 330-338. DOI: 10.59781/RIPI3024.
[19]Alam MM. Creating pro-poor transport: Connecting the dots-transport, growth, and poverty reduction. World Bank, 2015, 24. DOI: 10.1596/25003
[20]Ola AE. The impact of transportation on economic development in Nigeria. International Journal of Contemporary Applied Researches, 2018, 5(8), 140-154.
[21]Ochei MC, Mamudu ZU. Analysis of the contributions of transport sectorto economic growth in Nigeria. IOSR Journal of Economics and Finance, 2020, 11(6), 18-35. DOI: 10.9790/5933-1106031835
[22]Ghosh PK, Dinda S. Revisited the relationship between economic growth and transport infrastructure in India: An empirical study. The Indian Economic Journal, 2021, 70(1), 34-52. DOI: 10.1177/00194662211063535
[23]Barro RJ. Government spending in a simple model of endogeneous growth. Journal of Politcal Economy, 1990, 98(5), 103-125. DOI: 10.1086/261726
[24]Romer PM. Increasing returns and long-run growth. Journal of Political Economy, 1986, 94(5), 1002-1037. DOI: 10.1086/261420
[25]Krugman P. Increasing returns and economic geography. Journal of Political Economy, 1991, 99(3), 483-499. DOI: 10.1086/261763
[26]Quickonomics. Third-party insurance, 2024. Available from: https://quickonomics.com/terms/third-party-insurance/: 19 October 2025.
[27]Tamplin T. Third-party insurance. Finance Strategists, 2023. Available from: https://www.financestrategists.com/insurance-broker/property-and-casualty-insurance/third-party-insurance/: 19 October 2025.
[28]Kagan J. Third-party liability insurance types. Investopedia, 2025. Available from: https://www.investopedia.com/terms/t/third-party-insurance.asp: 19 October 2025.
[29]Arrow KJ. Uncertainty and the welfare economics of medical care. American Economic Review, 1963, 53(5), 941-973.
[30]Outreville JF. The relationship between insurance and economic development: 85 empirical papers for a review of the literature. Risk Management and Insurance Review, 2013, 16(1), 71-122. DOI: 10.1111/j.1540-6296.2012.01219.x
[31]Grant I. Socioeconomic factors and their influence on human development. Journal of Stem Cell Research & Therapy, 2025, 14(3), 1-2. DOI: 10.35248/2167-0358.25.14.280
[32]Rodrigue JP. The Geography of Transport Systems (5th ed.). Routledge, 2020. DOI: 10.4324/9780429346323
[33]Arvis JF, Ojala L, Wiederer C, Shepherd B, Raj A, Dairabayeva K, et al. Connecting to Compete 2018, Trade Logistics in the Global Economy. World Bank Group, 2018. DOI: 10.1596/29971
[34]African Development Bank. African Economic Outlook 2018. African Development Bank Group, 2018.
[35]Musgrave RA, Musgrave PB. Public finance in theory and practice (5th ed.). New York: McGraw-Hill Book Co, 1989.
[36]Keynes JM. The general theory of employment, interest and money. International Relations and Security Network, 1936, 1-190.
[37]World Bank. (2022). World Development Report 2022: Finance for an equitable recovery. World Bank Group. https://www.worldbank.org/en/publication/wdr2022
[38]Ward D, Zurbruegg R. Does insurance promote economic growth? Evidence from OECD countries. Journal of Risk and Insurance, 2000, 67(4), 489-506. DOI: 10.2307/253847
[39]Haiss P, Sumegi K. The relationship between insurance and economic growth in Europe: a theoretical and empirical analysis. Empirica, 2008, 35(4), 405-431. DOI: 10.1007/s10663-008-9075-2
[40]Rejda GE, McNamara MJ, Rabel WJ. Principles of risk management and insurance (14th ed.). Pearson, 2022.
[41]Arena M. Does insurance market activity promote economic growth? A cross-country study for industrialized and developing countries. Journal of Risk and Insurance, 2008, 75(4), 921-946. DOI: 10.1111/j.1539-6975.2008.00291.x
[42]Becker GS. Human capital: A theoretical and empirical analysis, with special reference to education. National Bureau of Economic Research, 1964.
[43]Schultz TW. Investment in human capital. American Economic Review, 1961, 51(1), 1-17. DOI: 10.3386/w0033
[44]World Bank. (2018). World Development Report 2018: Learning to realize education's promise. World Bank Group. https://www.worldbank.org/en/publication/wdr2018
[45]Hanushek EA, Woessmann L. The knowledge capital of nations: Education and the economics of growth. MIT Press, 2015.
[46]Todaro MP, Smith SC. Economic development (13th ed.). Pearson, 2021.
[47]Ricardo D. On the principles of political economy and taxation-1817. Dover Publications, 1817.
[48]Banister D, Berechman Y. Transport investment and the promotion of economic growth. Journal of Transport Geography, 2001, 9(3), 209-218. DOI: 10.1016/S0966-6923(01)00013-8
[49]World Bank. (2024). Global Economic Prospects. World Bank Group. https://www.worldbank.org/en/publication/global-economic-prospects
[50]Organisation for Economic Co-operation and Development. Tax policy reforms 2021: Special edition on tax policy during the COVID-19 pandemic. OECD Publishing, Paris. 2021. DOI: 10.1787/427d2616-en
[51]Mankiw NG. Principles of economics (9th ed.). Cengage Learning, 2021.
[52]World Bank. World Development Indicators. World Bank Group. 2024.
[53]Konno A, Kato H, Takeuchi W, Kiguchi R. Global evidence on productivity effects of road infrastructure incorporating spatial spillover effects. Transport Policy, 2021, 103, 167-182. DOI: 10.1016/j.tranpol.2021.02.007
[54]Varghese AM, Pradhan RP. Transportation infrastructure and economic growth: Does there exist causality and spillover? A Systematic Review and Research Agenda. Transportation Research Procedia, 2025, 82, 2618-2632. DOI: 10.1016/j.trpro.2024.12.208
[55]Calderón C, Servén L. Infrastructure, growth, and inequality: An overview. Policy Research Working Paper Series 7034, The World Bank, 2014.
[56]Holmstrom B, Tirole J. Liquidity and risk management. Journal of Money, Credit and Banking, 2000, 32(3), 295-319. DOI: 10.2307/2601167
[57]Giambona E, Graham JR, Harvey CR, Bodnar GM. The theory and practice of corporate risk management: Evidence from the field. Financial Management, Winter, 2018, 783-832. DOI: 10.1111/fima.12232
[58]Wikipedia. (2026). Strategy of unbalanced growth. Wikimedia. https://en.wikipedia.org/wiki/Strategy_of_unbalanced_growth
[59]Adebayo EA, Agum C. Impact of road transportation on Nigerian economic growth: 1985-2022. 2023.
[60]Isimoya OA, Akindipe EA. Gross premium income and claims settlement of marine and aviation insurance in Nigeria: A Panel Approach. Acta Universitatis Danubius, 2022, 18(6), 108-118.
[61]Ogundipe AA, Oye QE, Ogundipe OM, Osabohien R. Does infrastructure absorptive capacity stimulate FDI-growth nexus in ECOWAS? Cogent Economics and Finance, 2020, 8(1), 1751487. DOI: 10.108023322039.2020.1751487
[62]Ojide MG, Oyedele OA, Ukwueze ER, Ikpeze NI. Evaluating the effect of road infrastructure on household income in Ogoni community, River State, Nigeria. Journal of Economics and Allied Research, 2016, 1(1), 93-105.
[63]Skorobogatova O, Kuzmina-Merlino I. Transport infrastructure development performance. Procedia Engineering, 2017, 178, 319-329. DOI: 10.1016/j.proeng.2017.01.056
[64]Ajemunigbohun SS, Oreshile AS. Risk attitude and demand for motor insurance: An examination of selected motorists in Lagos State, Nigeria. Development Country Studies, 2014, 4(21), 144-153.
[65]Abdul-Fatawu M, Logubayom AI, Abonongo J. Determinants of the demand for life insurance in the Northern region of Ghana- A study of the Tamale metropolis. The Journal of Risk Management and Insurance, 2019, 23(1), 52-69.
[66]Fadun OS, Isimoya OA, Ugwuoke AO. Socio-economic determinants of life assurance purchase in Nigeria. EKSU Journal of the Management Sciences, 2024, 3(1), 288-306.
[67]Badru FA, Yusuf TO, Isola W. Socio-cultural factors affecting insurance patronage in Lagos State, Nigeria: An exploratory study. African Journal of Accounting, Economics, Finance and Banking Research, 2013, 28, 43-55.
[68]Dawodu AW. Evaluating the impact of road infrastructure on motor insurance claims: Empirical evidence from Lagos state, Nigeria. Journal of Social Sciences & Humanities, 2025, 10(2), 219-230.
[69]Enyinda CA. Trend of motor accident insurance claims in Nigeria. Fuoye Journal of Finance and Contemporary Issues, 2022, 2(1), 63-71.
[70]Adepoju OO. Analysis of road transportation infrastructure construction and maintenance for sustainable development in South-Western Nigeria. Journal of Sustainable Development of Transport and Logistics, 2021, 6(1), 49-58. DOI: 10.14254/jsdtl.2021.6-1.4
[71]Dagare S. The impact of government spending on economic development: A comprehensive study of public expenditure and its role in national growth. Integrated Journal for Research in Arts and Humanities, 2026, 33-37. DOI: 10.55544/ijrah.dyparts.7
[72]Ahmad H, Sadeeque J, Farooq U, Hayat U, Haroon U. Fiscal policy determinants impact on the economic growth with the moderating role of the exchange rate and inflation rate: Evidence from an emerging economy. Journal of Excellence in Management Sciences, 2024, 3(3), 68-81. DOI: 10.69565/jems.v3i3.317
[73]Owuna AA, Henry EA, Odonye OJ. Impact of insurance sector on economic growth in Nigeria. Polac Management Review, 2024, 4(2), 36-48.
[74]Fadun OS. Analysis of the impact of insurance claims settlement on economic growth in Nigeria. International Journal of Business Ecosystem & Strategy, 2023, 5(3), 51-59. DOI: 10.36096/ijbes.v5i3.424
[75]Fadun OS, Silwimba P. Does insurance promote economic growth? Evidence from Nigeria. Nigeria Journal of Risk and Insurance, 2023, 13(1), 1-24.
[76]Oloyede JA, Folorunsho A, Ogamien OF. The Impact of Insurance on Economic Growth in Nigeria. Nigerian Journal of Banking and Financial Issues, 2023, 9(1), 1-8.
[77]Creswell JW, Creswell JD. Research design: Qualitative, quantitative, and mixed methods approaches (5th ed.). Sage Publications, Los Angeles, 2018.
[78]Saunders M, Lewis P, Thornhill A. Research methods for business students (8th ed.). Pearson, 2019.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Adewale Adegoriola, Najimu A. Nafiu (Author)
This work is licensed under a Creative Commons Attribution 4.0 International License.
