Nigeria has 853 kilometers of coastline, 450 kilometers inland waterways and a sovereign right to 200 nautical miles (370.4km) exclusive economic zone. In spite of these, water transport has a share of 1.6% of Nigeriaâ€™s domestic product; suggesting that this resource has not been effectively harnessed for development. This study examined the opportunities and challenges of waterway transportation in the coastal area of South Western Nigeria. The objectives were to: (i) evaluate the potential of the area for inland water transport development; (ii) examine the contribution of inland waterway transport to passenger and freight movement; (iii) identify the factors determining the impacts of inland waterway transportation on socio-economic development; and (iv) identify the problems of inland waterway transportation in the study area.rn Both primary and secondary data were used to elicit information on basin morphometry, capacity of jetties, inland water operations, contributions of inland waterway and on the challenges facing inland waterway transport in the study area. Purposive and systematic random sampling techniques were employed based on stakeholder theory. Two types of questionnaire were used consisting of 415 copies administered to eight relevant government agencies and 570 to residents in the southwest coastal area. The analytical tools employed were orthogonal factor analysis, multiple regression analysis and post-hoc analysis.rnThe findings of the study were that:,rni.Inland waterway has high potential in the study area. The results of basin morphometry analyses confirmed that the study area is highly riverine in nature (stream frequency = 1.58, drainage density = 1.10 km / km2, number of river basins = 48, total numbers of streams = 873);rnii..waterway transportation is largely underutilized. The example from Lagos for which secondary data were available showed that in 2015, there were only 318 registered boats as against 298,319 road vehicles. An average of 2 million of the over 20 million Lagosians travel by water monthly. Most of the residents still depend on other modes of transportation; rniii.. the factors determining the impacts of inland water way on socio-economic development vary among the three coastal states. In Lagos, they are: waterway underutilization, improvement in income, poor jetties facilities, improvement in education, provision of job opportunities and poor terminal infrastructure (R2 = 68.9%). In Ogun state, they include improvement in average income, relatively maintained terminal facilities, relatively functional port facilities, relative access to port facility and provision of employment (R2= 69.1%). In Ondo state they are: waterway underutilization, political interference, poor jetty infrastructure, improvement in income, and job opportunities (R2=78.9%); and rniv..financial constraints, congestion at the jetties, insufficient jetty facility, and political influence were found to be the major challenges of port utilizationrn. rnThe study concluded that inland waterway have high potential for transportation, but it is largely underutilized. The study recommended the need to connect these jetties to other modes of transportation and the encouragement of private-public participation as a way of injecting the required capital for development in the coastal area of south west Nigeria.