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THE VALUATION OF THE COST OF LOSSOUTPUT DUE TO ROAD TRAFFIC CRASH IN NIGERIA.
Danladi Slim MATAWAL 1AKINMADE. O.D2. 1. DG/CEO Nigeria Building and Road Research Institute Abuja 2. Research Officer Nigeria Building and Road Research Institute Abuja

Abstract. The main objective of this monograph is to estimate the cost of loss output due to road traffic Crash in Nigeria using the discount formula technique and to present the magnitude of these in monetary values to have a clearer picture of their consequence to the economic at large, it attempts to determine the cost due to loss of output of fatality, serious injury and minor injury. The study shows that the highest average cost of lost output per victim is from the age above 18 for serious and fatality as classified by FRSC and if the person dies due to traffic accident at above 18, the estimated average cost of lost output is N19, 724,800.00 for fatality and for serious injury is N300,288 using the discount formula. The result shows that for the year 2011 ,the total loss output due to road traffic crash was N35,549,877,504.00 which is about 0.14% of the GDP.it was established that over 97.9% of the total cost of lossoutput is derived from fatal accidents alone indicating clearly their effect and it amounted to N 34,794,547,200.00.How ever from the study it is seen that there is serious under reporting of accident cases due to the estimates as compared to the 3% of GDP been the averaged loss to road crash by developing countries from WHO studies and loss of output takes at least 2.5% but in this studies is only 0.14%. Finally proper planning on transportation system and facilities, appropriate allocation of resources and implementation of an enhanced traffic safety program is needed road safety audit should be carried out by road safety expert and the recommendations should be adhered to.

Keywords: Road accidents, lossoutput, GDP.Nigeria

INTRODUCTION.

A Road traffic accident is one of the major burden or problems of most countries. Based on report from world health organization in 2009 road accidents caused the deaths of more than 1.2 million and the injury of between 20 and 50 million people annually worldwide .However Lossoutput is generally known to be the biggest resource cost indebted due to road traffic crash. It is an expression of the loss due to productive of manpower to the society be it permanent or temporary. According to siggua 2008 its value varies widely ranging from a one day lost time for minor injury to long years of forgone work for those killed or permanently disabled. This menace is apparently more in developing nation Nigeria and may result from priorities being geared toward efforts for infrastructures development, improving mobility and addressing the need for better public transportation. The importance of estimating the cost of road traffic accidents stems from the importance of drawing attention to this problem not only as a social problem that costs a lot of people their lives but also as an economic problem that costs the society a lot of money and adds an undesirable economic burden on it. Moreover, cost estimation helps to clarify the size of this problem and the economic benefit arising from preventing such accidents. This can be done through a cost benefit analysis that may guide policy makers, especially in developing countries with limited resources, to allocate road safety investments optimally as much as possible. As previously seen, there have been a limited number of attempts to estimate road traffic accidents cost in Nigeria. These attempts have different limitations as some of them suffer from data deficiencies, and others lack cost components in their calculations or an adequate clear methodology for cost estimation. This study tries to estimate the cost of loss output due to road accident using an integrated methodological framework. In this regard, the study introduces a detailed and comprehensive technique for cost estimation that can be modified and updated regularly. The rest of this paper is organized as follows: section 2 discusses the

literature review, section 3 methodology employed to estimate the cost of road traffic accidents in Nigeria, whereas Section 4 shows the estimation and discussion of results. Section 5 conclusion and section six recommendation.

TABLE 1.0 YEAR

Road traffic Crash Report.2000-2010. SERIOUS MINOR CASES 8185 7190 7882 6948 4143 5550 4812 5671 6024 2819 CASES 5379 3325 2527 4051 2620 964 1503 2646 2370 1333 TOTAL CASES 20530 14544 14364 14274 9062 9114 8477 11341 10854 5330 PERSONS PERSONS TOTAL KILLED 9946 7407 6452 5351 4519 4944 4673 6661 5693 4065 INJURED 23249 22112 18116 16897 15779 17390 17794 27980 27270 18095 CASUAL 33195 29519 24568 22248 20298 22334 22467 34641 32963 22160

FATAL CASES

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

6966 4029 3910 3275 2299 2600 2162 3024 2460 1178

SOURCE: FEDERAL ROAD SAFETY CORP, POLICY RESEARCH AND STATISTICS REPORT.

Scope and Limitation. This study focused on the loss of output or lost in productivity of a person due to road traffic crash in Nigeria .It only estimates the cost of loss of output of fatality, serious and minor injury. Also this study is limited to available data from NBS, FRSC, Ministry of health, and Ministry of labour and productivity.

Significance of the study.

This study will give information about the cost of traffic accidents in Nigeria particularly cost of loss output or productivity. Also it will help to evaluate the effectiveness of road safety programs as well as in the appropriate allocation of the country limited financial resources for the most efficient plans for traffic accident in the country.

Objective of the study.

This study aims to estimate the cost of loss output of traffic accidents and to present the magnitude of this accident in monetary values and to have a clearer picture of their economic effects specifically, it attempts to determine the cost due to loss of output of fatality, serious injury and minor injury.

Literature Review.

In 2005 the traffic accident cost estimation in Thailand employed the same principle like most researchers used by examining losses in terms of time and income which should have been earned during the remaining working life of the dead in estimating lost output. In the case of injury, income losses are estimated during and after the hospitalization period, both for the injured and their care takers. Therefore, it is necessary to make projections of future income for those affected by accidents. While on The Cost of Traffic Accident in Vietnam (2005), lost output refers to the loss of the national economy of the productive capacity from those affected by a road accident. Lost output costs relates to loss of capacity due to time delays of the victims and relative persons at the accidents, time for recovery and rehabilitation (such as time for driver to send vehicle to workshop, time for medical treatment in hospital and even non-hospital).More importantly, lost output includes permanent lost of productive years due to fatal accidents, or reduced productive capacity due to serious accident. In some cases, there are times required to looking for a new job because after accident, victims are unable to do with their job because of being injured in a crash. In The Cost of Traffic Accident in Brunei Darussalam (2005), Brunei Darussalam estimated and computed the economic rate of productivity for fatalities, no weight was given to the different types of individuals involved, except for the consideration of their age. An average value was assumed (i.e., all victims are assumed to be average workers capable of an economic production measured by the per capita gross domestic product obtained from the Brunei Darussalam Statistical Yearbook). For injured victims, lost output was computed based on the average wage rate of patients, and a single average national wage rate was used to calculate lost output. Future lost output was then expressed in present values by applying a discount rate, which in Brunei Darussalam's case was 5.5% and taken from the yearbook.

The Estimation of Socio-Economic Cost of Road Accidents in Metro Manila (2005), the study found that the average age of fatalities is 31 years and 30 years for injuries. The National Labor Codes (Presidential Decree 442) compulsory retirement age of 65 was used, and the average lost economic years of fatalities as 34 years was deducted and the paper assumes that all the victims are working with capabilities to earn this wage PhP 10,911 average monthly wage rate across the covered occupations for Metro Manila without data on patients economic profile,. Lost labour output of fatalities was computed using the cumulative present values of the assumed wages of the tabulated lost years of the fatalities. This produces a lost labour output of fatalities pegged at PhP 1,459,509. Short term lost wages refers to economic output lost due to non-productivity as a result of an injury or spent time recovering from an injury. This also includes the days spent of a serious injury in a hospital before eventually dying. F.K.Afukaar,W.Agyemang,E.K.Debrah and W.Ackaah.(2008) carried out a study in estimating the cost due to road traffic crash in 2004,results showed that for the year 2004, the national cost of road traffic accidents was GH 123.46 million (US$137.1million) representing 1.6% of the gross domestic product (GDP). The study established that GH33,730 (US$39,460.00) is lost to the economy through each fatal road accident and that over 60% of the total cost of accident is derived from fatal accidents alone showing clearly their economic effects. In addition, casualty-related accident accounted for over 90% of the total national road traffic accident costs. These high figures demand concerted efforts through public and private partnerships to prevent the occurrences of severe accidents on the roads. There has been no substantive studies on the estimation of socio-economic loss due to road crash recently in Nigeria and hence the need for this study.

METHODOLOGY Loss of output is estimated by first calculating the number of days or years lost. This is obtained by subtracting the average age of accident fatalities from the retirement age. If the accidents involve serious injury, the number of days of hospitalization and any recovery time required should be taken into account. For accidents resulting in slight injuries, the number of days absent from work each time an outpatient visit is made is considered to be the number of days lost. It is standard practice for these accidents to be classified as being fatal, serious, or slight. The definitions most commonly used are as follows. A fatal accident is one in which one or more people are killed as a result of an accident, provided death occurs within 30 days. A serious accident is one in which there are no deaths but one or more people are seriously injured. The people are normally hospitalized due to injuries sustained, including fractures, concussions, internal injuries, crushing, severe lacerations, or severe general shock requiring medical treatment. A slight accident involves no deaths or serious injuries. The people have cuts, sprains, or bruises.

Discounted Costs

In terms of economic costs, the study considers the effects of time over money. Discounting is the process of converting an amount of money to its equivalent value at a different point to its present value. So in this study, these was calculated using the current value of future costs and income and an equation that considers the discount rate and the number of years lost between now and up until when the costs occur. This is illustrated by the Present Value formula: Lost Output per fatality =

Where W is the average annual wage of a fatality is the average lost years, and r is the average discount rate .Thus for W = N 416,000,n =35 years and r = 10%

Analysis of Data and Discussion. Data collation used in this study include data from Federal Road Safety Corp of Nigeria, National Bureau of Statistics, National salaries, incomes and wages commission, Ministry of labour, Ministry of Health and some from literature reviewed. AVERAGE AGE OF FATALITY IN NIGERIA FOR 2011

AGE GROUP 1 2-3 4-12 13-17 18 TOTAL

AVERAGE AGE 0.5 2.5 8 15 40

NUMBER 0 39 112 190 4031 4372

TOTAL YEARS 0 98 896 2850 161240 165084

WEIGHTED AVERAGE AGE = 165084/4372=37.75 35

In Nigeria, person in Government Salaried employment retire at the age of 60 some 70, persons on non-salary status retire at 65 years and self-employed persons retire at ages greater than that. The weighted average of retirement age in Nigeria was estimated to be 60+70+65 /3 = 65 years. For the purpose of this study the average number of years lost output following a fatal accident was about 30 1.e 65-35=30years.

The average annual wage used is $2600 which is about N 416,000 for an exchange rate of 160/$. The rate of discount used for the study is 10%. The total discounted cost loss output was established to be $26,800= N 4,288,000 The average number of days spent in a hospital in Nigeria for all cases, not only road accident patient was 10 days .However an analysis of medical records shows that RTA patient the average was longer approximately 21 days. Information collected from few doctors and nurses shows that a further 30 days is spent on average were spent for recovering fully at home from serious accident. Thus the average lost output for a serious accident was estimated to be 40 days. With an average daily wage of $8 i.e 2600/365 The cost of output for serious accident was 51 $8=$408= N 65,280. For slight injury the lost output was small and an average of 3 days were lost hence the cost of loss output was following a slight road accident was estimated to be . 3 8 =$24= N3840 For 2011 the casualty is 21836 and the number of accident is 4765 Applying a ratio of 21836/4765=4.6 cost per accident would be come. Loss output in fatal accident. 4.6 N 4,288,000= N19,724,800. Loss output in serious injury. 4.6 N 65280= N300,288

Loss out put in minor injury. 4.6 N 3840= N17, 664.

THE TOTAL COST OF LOSS OUTPUT DUE TO ROAD ACCIDENT FOR 2011 DATA. Total number of fatality cost per fatality.= 1764 19724800= N 34,794,547,200.00 Total number of serious accident cost per serious accident= 2485 746,215,680.00 Total number of minor accident cost per minor accident = 516 17,664 = N 9,114,624.00 GRAND TOTAL= N 35,549,877,504.00 300,288= N

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Conclusion.

The study found out that the highest average cost of loss output per victim is from the age range of above 18 for serious injury and fatality. This means that if a Nigerian dies due to traffic accident at the age of above 18, the average cost of lost output is is N 300,288 for serious injury and N 19,724800.00 for fatality. The lowest average cost of lost output is from minor injury amounting to N 17,664 For the fatality, the pattern of cost of lost output is increasing from the age of 4-12 to above 18 as categorized by FRSC. Finally according to the study traffic accidents results to huge amount of cost or losses especially due to loo of output to the victim and the society. The cost of loss of output is too much and need to be discussed, need to be planned, need to allocate budget for appropriate transportation system and facilities emphazing on the traffic safety programs in the country. It was deduced that there is high rate of under reporting of accident cases and also those that died after 30 days may be at home or in the hospital since the loss due to loss of output was put to 0.14 percent which is very low compare to what has been stipulated by World Bank for developing nation. However from the study it is seen that there is serious under reporting of accident cases due to the estimates as compared to the 3% of GDP been the averaged loss to road crash by developing countries from WHO studies and loss of output takes at least 2.5% but in this studies is only 0.14%

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Recommendation.

The cost of road traffic crash in Nigeria should be updated and this cost comprises the Medical, property damages, administration cost, and this study lostoutput. However the World health organization suggest that in developing nation they loss about 3% of the GDP on road traffic crash which loss of output takes about 70%.Given the number of accidents the determination of the unit cost of each component cost will help in the estimation of the economic losses incurred by the country. It is recommended to drastically and holistically improve the database system specifically on the traffic related accidents to give more reliable and accurate information in costing traffic accidents.Governent should increase its investment in traffic safety program and interventions as well as data collection coverage to reduce the features of underreporting of road accidents especially hospital data surveillance system and trauma and road traffic injuries must be strenghthen.Furthermore the road accidents cost studies should be undertaken periodically to update the cost indicators in road traffic crash in Nigeria. Finally proper planning on transportation system and facilities, appropriate allocation of resources and implementation of an enhanced traffic safety program is needed road safety audit should be carried out by road safety expert and the recommendations should be adhered to. This will go a long way in reducing traffic accidents and improve the economic life of Nigerians and the country economic growth as well.

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References [1] Anuual Federal Road Safety corp Report (2011) [2] A. Downing(1997) "Accident Costs in Indonesia: A Review", Paper Presented at the international Conference on Road Safety, Andhra University, Visakhapatnam, India. [3] D. Mohan(2002) "Social Cost of Road Traffic Crashes in India", in Proc. 1st Safe Community Conf. on Cost of Injury, Viborg, Denmark. [4] Ghana,F.K.Afukaar,W.Agyemang,E.K.Debrah and W.Ackaah.(2008).socio-economic cost of road traffic accident Ghana.Journal of Builidng and Road Research Ghana Vol.11. [5] G. D. Jacobs, "Costing Road Accidents in Developing Countries (1995)", in Proc. 8th Road Engineering Association of Asia and Australasia (REAAA) Conf., Taipei, Taiwan, 1995. [6] G. Jacobs, A. Aeron-Thomas, and A. Astrop (2000), "Estimating Global Road Fatalities", TRL Report 445, Transport Research Laboratory, Crowthorne. [7] H. R. Al-Masaeid, A. A. Al-Mashakbeh, and A. M. Qudah(1999), "Economic costs of traffic accidents in Jordan", Accident Analysis and Prevention, vol. 31, no. 4, pp. 347-357. [8] M. De Leon, P. Cal, and R. Sigua (2005). "Estimation of Socio-Economic Cost of Road Accidents in Metro Manila", Journal of the Eastern Asia Society for Transportation Studies, vol. 6, pp. 3183- 3198. [9] R.Elvik (1995). "An Analysis of Official Economic Valuations of Traffic Accident Fatalities in 20 Motorized Countries", Accident Analysis and Prevention, vol. 27, no. 2, pp. 237-247. [10] Ross Silcock, and Transport Research Laboratory (TRL)(2003). "Guidelines for Estimating the Cost of Road Crashes in Developing Countries: Final Report", Project R7780, Department for International Development [11]. Riches S. Bacero,Richard G.Sigua ,Hilaro San O. Palmiano(2011).Valuation of the los the cost of lossoutput due to traffic cra accident in the philippines Proceedings of the eastern Asia Society for transportation studies ,Vol..8.

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[12] T. T. Anh, N. X. Dao, and T. T. Anh,(2005)."The cost of road traffic accident in Vietnam, Proceedings of the Eastern Asia Society for Transportation Studies, vol. 5, pp. 1923-1933, [13] World Health Organization World Health Organization, Geneva,(2009), "Global Status Report on Road Safety: Time for Action" World Academy of Science, Engineering and Technology 66 20

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Akinmade Oluwatosin Daniel is a resourceful and result-oriented individual who aims at Utilizing his potentials optimally to achieve desired organizational aims, objective and goals in a highly competitive, challenging and in high- pressure work environment, born on the 8 August, 1983, single. A citizen of Nigerian from Ondo state. Had his bachelors in civil engineering in 2008 from Federal University of Technology, Minna, Niger State. He proceeded to the prestigious Universiti Teknologi Malaysia in 2011,where he had his masters degree in highway and transportation, attended certification program in road safety audit in central road research institute new Delhi India 2012. My interest is road safety Engineering, pavement materials analysis, traffic engineering. Currently a research officer in the Nigerian Building and Road Research institute Abuja .I love Reading, Travelling and meeting new friends.