Nigeria’s $60 billion logistics industry is falling under the weight of infrastructural gaps and investment misfires that stifle its contribution to GDP and inflate the cost of goods. But industry players say the country can revive and scale the sector if it diversifies its investment beyond road networks.
At BusinessDay’s mobility and logistics conference on Wednesday in Lagos, analysts described the current structure as a ‘collection of disjointed systems,’ stating that a transition to investment in systems that connect ports, rails, roads, and inland depots could help move goods around the country faster and improve Nigeria’s last-mile goals.
Nigeria’s logistics costs make up 20% to 30% of an item’s total cost, according to data presented by the African Center for Supply Chain, which is more than double the international standard of 8 to 11%.
According to the agency, Nigeria is fertile for infrastructure development and has the capacity to thrive internationally and also expand internally, but it lacks the “unified mobility and logistics framework” needed to compete. “We are not yet there,” said Stephen Adeloro, national coordinator,African Center for Supply Chain.
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One of such ways, experts say Nigeria could get there faster is if it invests in technology that is inclusive and sustainable.
Currently, only about 60% of rural communities have all-season road access, creating major difficulties in delivering essential goods. This, coupled with the issue of inefficient cold chain logistics, results in significant post-harvest losses, with food waste in Nigeria reaching about 50%.
With the help of private financiers, industry players say investments can go into inland dry ports and electric parks, digital connectivity infrastructure, and shared last-mile distribution systems.
Modern last-mile solutions involve drones and EV-based deliveries. Experts say this will help serve remote and hard-to-reach populations.
The blueprint for this innovation is already in operation. Zipline Nigeria currently delivers essential medical supplies, including vaccines and blood, in Kaduna, Bayelsa, and Cross River States.
The technology has helped in places such as in Cross River State, where drones quickly delivered vaccines during a flood, which would have been impossible with conventional transport networks like roads.
They say if this were to be scaled, issues like ‘zero-dose’ could be solved.
“Many of the women here cannot imagine that there are children in this same country of ours that have not gotten one vaccination shot for the first year of their children’s life,” said Ogochukwu Ugboma, dean, School of Transport and Logistics, Lagos State University (LASU).
But she said collaboration among universities, government agencies and private firms to train operators is crucial.
“We need drone pilots. It is a skill.” She said the universities, government and other industry players should not just be observers. “They should be co-creators in running this curriculum. They should sponsor the universities sometimes to impart some of the knowledge of real-world situations.”
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Abba Kyari, Nigeria’s minister for Agriculture, said the country loses up to $10 billion in post-harvest losses annually due to poor logistics, storage and handling issues.
According to Amit Bose, chief financial officer, Valency Agro Nigeria Limited, the restricted options to roads and inadequate transport services lead to loss of revenue and food waste that businesses are not prepared for. He advised investments in warehouses and cold storage near places where such agricultural products or perishable goods are grown.
“In Kaduna, if you want to export ginger or if you want to bring ginger from Karuna to the rest of the country, you should have warehouses and coal storages in such locations near the farm gate, so that the goods can move at the right time and the farmers, for that purpose, people who are growing, do not lose money because proper logistics channels are not available.”
He said that businesses that manage fleets must also invest in tracking systems like telematics to help prevent losses. “When Cocoa is moving from Ikom, Cross River or when Cashew is moving from Kogi state, to the ports in Apapa, Tincan, for that purpose now in Delhi, all our trucks, the fleet managers were tracking that truck to know whether there is any abnormal fuel consumption or not.”
He said telematics helped his company to know whether his trucks went through the proper route or not, and whether the driver drove in the right way. “Whether there is any harsh braking, whether there is any idle timing or not, and whether there is a requirement for a route divergence, or the driver has taken the route divergence at his own will.”
“So the telematics and fuel sensors together actually act as a smart solution for any fleet movement from anywhere in the country to any other location in the country to see whether the trucks are moving correctly or not,” he said.
Water, which Nigeria has in abundance, is also an underutilised channel that industry players see mobility and logistics potential in.
“Lagos is a city that is surrounded by water. If we have inland waterways, well-developed, we wouldn’t have people spending so many hours in traffic just to get to work, or get to wherever they have their businesses to do,” Samuel Ebidunmi, fleet supervisor at MTN Nigeria Communication Plc. “So it simply shows that there is a gap, because if it is possible for me to park my vehicle and then conveniently get to the island using a boat or using a train, I would prefer that.”
Oluwaseun Osiyemi, Lagos state commissioner for Transport, spoke of the state plans of a “last-stop ferry and jetty services making terminals with adjacent bus routes and mini-hubs.” Osiyemi noted that the transport policy includes Public-Private Partnerships driven by inland waterways logistics for light cargo.
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Ebidunmi, who narrated how a journey of 45 minutes took six hours, said Nigeria must develop the road and rail infrastructure that allows a modal shift from the roads.
The unanimous vote was that Nigeria must put its money where its mouth is and move beyond its policy formulation to implement “scalable and affordable” last-mile delivery solutions. One participant said Nigeria must invest in the people, process, technology and infrastructure
“We don’t need to reinvent the wheel. The policies are there. We just need to take action,” said. Reynolds Shodeinde, national executive director, Chartered Institute of Logistics & Transport (CILT), Nigeria.
