Luxury bus transportation in Nigeria
Context - please read here on luxury bus transportation in Nigeria.
Please read ABC Transport Plc financials to understand the bus system in Nigeria. No one makes money in that business because of bad roads, insecurity, etc. ABC Transport is a publicly traded company and that means we can see the undiluted data. ABC made losses in 2020, 2021 and could have also continued if not for the support. I do not expect state operated ones to be different.
That sector is terrible in economics. If you check, they have received at least N100 billion bailouts in the last two years via ticket support, CNG conversion, etc. Put that in context, you will agree that states like Abia and others have no chance.
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Every state is running losses on this except Lagos. But they hide them under transportation miscellaneous. Abia budget is item-line based and that makes it possible to see everything. That is why you read people write: they bought laptop this, etc because it is detailed to the pencil and pen. You can build institutional capability, but I can tell you that running one is a terrible idea because it does not compound with leverage.
If you close US Postal service, more than 90% of ecommerce companies in US will go bankrupt. The US subsidizes their businesses by making sure logistics works but later recovers by taxing those activities. If Abia moved from N20b IGR to N100B while losing N1.2B, is that not a good strategy? Every part of Abia must be connected to grow IGR to N300b.