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Diversified, export-oriented Nigeria can be boon for West African logistics


Even though the concerns persist on the decades-long dependence on oil and fear of free trade agreement destroying local players, the much-needed diversification and shift to export orientation of Africa’s biggest economy could be a real game-changer for logistics in West Africa.

Nigeria is the biggest economy in Africa with a Gross Domestic Product (GDP) of $448.12 billion in 2019 compared to $351.43 billion in South Africa and 303.09 of Egypt. Located in the western part of Africa, Nigeria is also called the gateway to this region, particularly due to the Port of Lagos, one of the biggest on the African continent. However, over the years the country has been crippled with logistics infrastructure deficit, roads and ports congestions and even tough customs regime. Simultaneously, logistics companies see huge potential for the future of supply chain business in Nigeria due to government policies to diversify the economy, the rise of e-commerce and the recent free trade agreement.

Nigerian logistics market

According to the 2018 African Centre for Supply Chain’s the Nigerian Logistics and Supply Chain Industry Report, the value of Nigeria’s logistics sector was estimated to be 250 billion Naira ($696 million) in 2018, a rise of 50 billion Naira ($140 million) from 2017 figures.

However, as per the June 2020 Research and Markets report, “The Nigeria freight and logistics market has been on a slow-growth trend for the past many years but is expected to grow at a CAGR of around 4 percent in the coming years.”

Maureen Adibuah, country manager of DHL Global Forwarding Nigeria, who sits in her head office in Lagos, said, “As the largest black nation on the planet, Nigeria has a huge young population and is blessed with the richness of natural resources heightening the need for a robust logistics industry. Due to its economic position, logistics is one of the fastest-growing industries in Nigeria. However, we have our challenges like the infrastructural deficit and tough customs regulations besides the problems posed by the Covid-19 pandemic.”

Lara Lana, Nigeria country manager for Maersk, noted that Nigeria is a strategic market for them in terms of the value they can deliver to customers on both shipping and logistics services. “Maersk can offer various inland deliveries via truck across Nigeria from Lagos, Kano, Ibadan, Aba and Onitsha. We cover both the ports of Onne and Apapa through our global ocean network enabling us to connect our customers to ports across the world.”

The Nigeria-based logistics companies are also trying to expand their reach by involving themselves in the global supply chains. For example, a few weeks back, GIG Logistics announced its expansion to the United Kingdom, a major exporter to Nigeria. The company intends to gain a significant part of the UK to Nigeria logistics business.

AfCFTA could increase the intra-African trade by around 52.3 percent, thus boosting the demand for better logistics facilities and infrastructure.
Maureen Adibuah, DHL Global Forwarding Nigeria

Congestion is an important problem faced by logistics companies in Nigeria whether it is in the ports or on the road even though infrastructural initiatives are trying to directly address them. Port of Lagos is one of the most affected logistics points in Nigeria due to this.

Adibuah informs that the new under construction Lekki port with 6 million TEUs capacity is a promising development and would help in easing the current congestion problems in the port of Lagos.

Meanwhile, Lana noted that railway development is critical to high volume inland deliveries and as such the ongoing investments by the government in this transport mode will reduce the cost of inland deliveries.

“Currently, truck deliveries hold an overwhelming proportion of transport modes within Nigeria. In recent years, we have seen water transport grow exponentially through the introduction of barges and we expect this trend to continue,” she…



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