All You Need to Know about Logistics in Nigeria
Logistics is the process of coordinating and moving resources including people, equipment and inventory from one place to another. M74Group is an example of an international logistics company. An international logistics company helps people, businesses and companies move resources from one country to another. They help you understand the target country and make informed decisions, helping your profit and revenue grow.
Nigeria is the 7th most populous country and currently the 49th largest export economy in the world, with huge potential for business. The country is a great destination for those interested in international trade. Some of the top commodities that Nigeria exports according to commodity.com include Crude Petroleum, Petroleum Gas, Cocoa Beans, Refined Petroleum and Rough Wood. Nigeria’s top import products include Refined Petroleum, Wheat, Raw Sugar, Rice and Palm oil.
Doing business in any of these commodities with Nigeria will bring in a lot of foreign exchange to any organization that trades in them. How then do you trade in commodities? By using reliable international logistics companies such as M74 Group.
The value of the logistics sub-sector of Nigeria's economy was ₦ 200 billion in 2017 and ₦ 250 billion in 2018, according to the Logistics and Supply Chain Industry report. Nigeria loses about ₦ 3.46 trillion every year due to poor infrastructure, poor implementation of logistics and corruption at ports in Nigeria, out of which ₦ 2.5 trillion are corporate earning losses, according to a survey carried out by the Lagos Chamber of Commerce and Industry in 2018.
The logistics sector accounts for only 5% of Nigeria’s GDP, compared to about 18% of GDP in countries with a more diverse and better supported transportation infrastructure.
Imported goods are cheaper than locally manufactured goods in Nigeria because of its poor infrastructure. Nigeria's poor infrastructure has constrained growth in the logistics industry. Time delays, bottlenecks for international shipments, poor tracking and tracing capabilities and poor logistics quality and competence are all industry risks that weigh on growth prospects for logistics and transport industries.
The Nigerian Postal Service (NIPOST) is a government agency that regulates the logistics industry in Nigeria and also provides the postal service for Nigerians. NIPOST by law regulates fees, charges, and penalties. They can do all of this without seeking the final approval of the Federal Ministry of Communications and the Digital Economy, according to an article seen on techpoint.africa. NIPOST released some guidelines which showed an increase in license fee around the middle of the year for players in the logistics sector. This caused such public outcry on social media that it led the Nigerian Ministry of Communications and Digital Economy to suspend it.
To successfully build a successful logistics company in Nigeria, organizations need to be innovative. Several logistics companies in Nigeria had to rework their model in order to be relevant in the market. Another requirement for logistics companies in Nigeria is to register with relevant bodies and organizations.
Most top businesses in Nigeria are successful because they got their logistics right. An example is that of Dangote Cement that is a logistics driven business. There are lots of opportunities in the logistics industry for international businesses in Nigeria, but only if they use the right international logistics, such as M74Group.
Ifeoluwa Oseni is an intern at M74, and a recent graduate from the University of Ibadan in Nigeria, where he studied Computer Science. His interests include cybersecurity, politics, and technology. He loves telling stories of positive changemakers in Africa on his blog, InterviewStories.
The views expressed above are those of the author and do not reflect the official position of the M74 Group, which remains neutral on all matters. Publishers assume no liability for content.