No one expects to start a business on a rosy bed, believe me most Nigerians don’t. But many of the challenges business owners have to tackle on a daily basis in order to survive are just unnecessary.

Nigeria Has a Huge Logistics Problem

Nigeria has a logistics problem, one that ranks amongst other key national issues like corruption, tribalism and power supply. The recently concluded general elections is a case in point. If a well funded public institution like INEC can still manage to propone an election due to logistics failure, you can imagine the huge challenge poorly equipped small businesses face every day.

Every day, millions of dollars worth of goods and services crisscross the length and breadth of this country, at an alarmingly high cost. A situation infatuated by needless inefficiency, inordinate regulation and deficient infrastructure. According to the 2018 Logistics and Supply Chain Industry Report, the economic value lost by this inefficiency is worth well over N250 billion. That’s about three per cent of the 2018 budget.

The Nightmare of Logistics

“My business relies heavily on logistics from the US & recently UK. Then logistics interstate in Nigeria. I am constantly on the phone every day begging these companies to please offer me the service “we agreed” on. Services I am paying for. DELIVER AS AGREED!” Bemi (@Bemi___ a twitter user) recently lamented. Much like her many businesses constantly lament even as they try to navigate Nigeria’s unfriendly logistics terrain.

Logistics affects business owners in Nigeria on two major fronts; cost and time. According to a World Bank report “transporting goods between two states in Nigeria costs over TWICE as much as it would do between two American states”. This cost is indirectly transferred to customers who would rather not buy than at such extortionate price. How would you justify buying a product worth a thousand Naira only to get it delivered to a pickup point for as much as N2,500 and upwards? And you wonder why Nigerians prefer to get their pizza delivered via the British Airways.

The time it takes to deliver goods within Nigeria is yet another issue. Even though it is highly irregular, it also takes a long period of time to get goods delivered. For instance, ShopRite, a foremost retailing company in Nigeria, says it can take up to 117 days for stocks to reach stores in Nigeria. A study on transport costs and time along the Lagos-Kano-Jibiya corridor found that transporting a 20-ft container by road costs USD 837 from Kano to Lagos and USD 1,548 from Lagos to Kano (N1 = 157 USD, USAID, 2013) compared unfavourably to Tema-Ouagadougou corridor linking Ghana and Burkina Faso, with 25 per cent higher costs and 150 per cent longer delays.

The option, as explored by most business owners, is between the fairly reliable but more expensive GIG Logistics and DHL or the below-par performing NIPOST of whom a business owner reportedly lost her goods worth more than N250,000 and is yet to get compensated for, and it is over a year now. Motor/Truck parks, a cheaper alternative is, unfortunately, more risky. Cases of lost goods, unreliable delivery timelines, arbitrarily set prices are sad, a usual phenomenon.
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