Regulatory Requirement for Starting a Road Transport Business

By Kingsley Effiong | 2 min read
19th May 2017
Regulatory Requirement for Starting a Road Transport Business

Commuting by Road Transport is a common means of transportation for a lot of Nigerians and it plays a crucial role in business transactions and daily interactions. In Nigeria today, there are basically two aspects of the Road Transport business; the passenger and the haulage transport.

The Passenger Transport

This aspect of the Road Transport business is done by rendering the service of conveying people from one location to a preferred destination for a fee. This is either done as an inter-state or intra-state transport business.

The Haulage Transport

The inter-state or intra-state transporting of goods is what the haulage transport business is concerned with.

The importance of the Road Transportation makes it an attractive business venture for entrepreneurs. If you are considering this line of business, the regulatory requirements are as follows:

Licenses/ Permits

  • Business Registration: If your vehicle would be operational as an inter-state transport, then it is important that you register your transport business with the Corporate Affairs Commission (CAC).
  • Valid Drivers License: This is a must have for every driver. Aside being a good driver, in order to effectively operate your business without any disturbances from officers of the law you need to have a valid driver's license from the Federal Road Safety Corps (FRSC). Applying for the drivers license will cost about N6,350[1].
  • Vehicle Insurance: All private or public operating vehicles on the road is expected to have insurance. Although cannot be predicted, there has been cases where haulage vehicles got involved in hazardous accidents which led to loss of goods and properties. The effects of such accidents could be reduced with adequate insurance.
  • Registration/ Documentation: In addition to registering with the National Union of Road Transport Workers (NURTW) and also doing all necessary registration that is required by the union bodies within any state that you will be operating, the legal documents you need to have for your vehicle(s) include:
    • A vehicle license
    • Roadworthiness certificate
    • Insurance certificate
    • Ministry of Transport (MOT) certificate

Process of Starting a Tricycle (Keke Napep) Transport Business

The factors to consider before starting a tricycle business include:

  • Cost: This is one important factor to consider when starting up any business. Acquiring a brand new tricycle would cost between N600,000 to N800,000 while a fairly-used one would cost between N75,000 to N300,000 depending on the condition of the tricycle at the point of sale[2]. With time these prices would probably change due to market price changes. With a good choice of location you are sure to make an average of N3,000 to N5,000 daily income.
  • Registration: It is imperative to have the necessary registrations done at your choice location before putting your tricycle on the road for business. There is therefore need to register with the National Union of Road Transport Workers (NURTW) and also register with the park union where the tricycle will be operating from.

With influx of people commuting via road, the Road transport business has become a very lucrative business. However, safety precautions demands that you abide by all road laws in order not to run afoul of the law binding road usage[3].

[1] Federal Road Safety Commission, The Drivers License Application, https://www.nigeriadriverslicence.org/pages/news/page/dA%3D%3D accessed Apri 20, 2017

[2] Jiji, Keke Napep Motorcycles and Scooters in Nigeria, https://jiji.ng/motorcycles-and-scooters/keke-napep accessed Apr 19, 2017

[3] Federal Road Safety Corps, Offences & Penalties, http://frsc.gov.ng/offences-and-penalties accessed Apr 20, 2017

Kingsley Effiong
A brand & communications specialist with over 3 years of experience in business, organizational and product branding, visual communications, and helping businesses understand and use marketing to grow.
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