Motorway Service Station Developers in Nigeria: The Largest and Fiercest Competition in the Industry

The global automobile industry is growing rapidly, especially in emerging markets. In 2016, there were about one billion cars on the road worldwide. That number is expected to double by 2035 as incomes in emerging markets rise and more people can afford cars for the first time. The implications of this growth are enormous for businesses that manufacture or sell goods and services related to automobiles. In Africa, the automotive industry has recorded impressive growth within the last few years. It is estimated that by 2020 sub-Saharan Africa will have a total vehicle stock of nearly 40 million units—a figure which will double from just over 20 million units in 2015. This presents opportunities for businesses that operate in this sector, with Nigeria being one of its key players.

What is a Motorway Service Station?

A motorway service area (MSAA) is an area where drivers of motor vehicles can park, rest, or eat while traveling on a motorway or an Autobahn, or a highway that has a speed limit of at least 80 km/h (50 mph). In the EU, all motorways must have at least one MSAA. In Nigeria, the MSAA is a place for travellers to stop for refreshments, restrooms, and parking, as well as for truckers to rest. It is usually found on highways and major roads, though there are some that can be found along the intercity roads. MSAA's provide services for drivers and passengers of cars, buses, trucks, and other commercial vehicles. It could include a restaurant, a shop, a gas station, a rest area, or a combination of the above. MSAA's are typically open 24 hours and include large parking areas for trucks. MSAA's are generally used as a stop-off point for people traveling a long distance by car or other transport. MSAA's are sometimes located at the ends of motorways, or on feeder roads leading to motorways. They are sometimes built between junctions of two motorways. When a motorway is being built, an MSAA may be built at the same time.

Why Develop A Motorway Service Station in Nigeria?

Nigeria's growing economy and the increasing number of cars on the road have led to growth in the demand for MSAA's. However, competition in the industry is fierce and there is a severe shortage of MSAA's in the country. The government's efforts to build more MSAA's to meet the growing demand will take time to materialise as the sector is highly regulated. To become a successful MSAA developer, one must be aware of the challenges and opportunities of entering the industry in Nigeria. Developers must understand the rules and regulations governing the construction of MSAA's, as well as the costs associated with the development.

How to Develop a Motorway Service Station in Nigeria?

The first step towards the development of a MSAA is to find a suitable location. The developer must take into account traffic patterns and the number of vehicles that use the highway. Next, the developer must apply for a permit from the Federal Ministry of Transport, given the location where he intends to build the MSAA. Following that, the developer must procure a general contractor to build the MSAA and obtain financing to cover all the costs.

Challenges of Developing a Motors Services Station in Nigeria

- Regulatory: The sector is highly regulated. Motorway service station developers must first secure the necessary permits to begin construction. The Federal Ministry of Transport regulates the establishment of MSAA's, while the Nigerian Customs Service (NCS) regulates the entry and exit of goods through the ports. Additionally, the Nigerian Communications Commission (NCC) and the Nigerian Electricity Regulatory Commission (NERC) must be consulted for regulatory compliance. The process of securing permits for MSAA development can be lengthy, and developers must be prepared for bureaucratic delays. - Land acquisition: Land acquisition is another challenge that developers must address. In most cases, it is difficult to obtain land for MSAA development. Land acquisition can be especially challenging in the densely populated areas of Lagos, Abuja, and Port Harcourt, where MSAA developers must negotiate with multiple landowners to obtain the needed land. - Financing: Financing is another challenge that developers must address. Banks are reluctant to provide financing to MSAA developers because of the risk involved in the business. The sector is highly competitive and profit margins are very low. Moreover, the sector is highly regulated. That being said, it is important for MSAA developers to find banks willing to lend to the industry and be prepared to provide the necessary collateral.

Conclusion

Motorway service stations are crucial in the day-to-day operations of commercial vehicles. These stations are located at intervals along the nation's highways and major roads, and have all the facilities needed for a smooth journey for drivers and passengers. In order for these facilities to thrive, it is important for investors to understand the challenges of operating in the industry and be prepared to address them.