Stakeholders demand urgent reforms as poor logistics cost Nigeria N5tn yearly

Nigeria’s inefficient logistics system is costing the country an estimated N5 trillion annually, causing nearly 40 million metric tonnes of food to perish before reaching consumers.

This was revealed at the 10th Anniversary Lecture of City Business News, under the theme, ‘Logistics as the Engine Room of Nigeria’s Economy,’ where experts called for sweeping reforms to reverse the nation’s worsening logistics crisis.

Speaking at the event, Boboye Oyeyemi, president of the Chartered Institute of Logistics and Transport (CILT), said Nigeria’s weak transport infrastructure, multiple road checkpoints, rising fuel costs and policy inconsistencies have crippled the movement of goods, particularly agricultural produce.

Oyeyemi noted that the country’s logistics inefficiencies are responsible for post-harvest losses each year.

Read also: Crippling logistics, energy costs threaten Nigeria’s non-oil export growth

He also said that despite its strategic importance, the logistics sector contributes only 3.73 percent to Nigeria’s Gross Domestic Product (GDP), largely due to persistent structural challenges.

“The agricultural sector bears the brunt of the crisis, with as much as 40 percent of farm produce wasted before reaching markets because of poor road infrastructure and inadequate logistics systems,” Oyeyemi said.

Beyond infrastructure deficits, he identified rising diesel prices and widespread extortion on Nigerian highways as major factors increasing logistics costs, disclosing that transport operators spend between N150,000 and N250,000 per trip on illegal payments at multiple checkpoints, thereby inflating the cost of moving goods across the country.

To address the challenges, Oyeyemi called on the federal government to eliminate illegal road checkpoints, subsidise Compressed Natural Gas (CNG) to reduce transportation costs, and encourage a dual-fuel system that enables logistics operators to use both petrol and gas-powered vehicles.

He further urged the government to restore weighbridges on major highways to prevent overloading by haulage operators, noting that excessive axle loads are responsible for the rapid deterioration of newly constructed roads.

Frank Nneji, founder of ABC Transport Plc, lamented what he described as decades of inadequate government attention to the road transport sector.

Nneji argued that while the aviation industry enjoys substantial investment and regulatory oversight to guarantee passenger safety, millions of Nigerians who rely daily on road transportation continue to face poor infrastructure and security challenges.

“The government should pay more attention to road redevelopment. They should hand off road development and concession some of the major roads,” he said.

Read also:High labour, logistics costs squeeze farmers amid petrol price hike

Nneji also expressed concern over the worsening security situation on Nigerian highways, urging the government to strengthen measures to protect commuters and transport operators.

Stakeholders stressed that unless the federal government creates a more enabling operating environment, protects investments in road infrastructure and ensures policy consistency, Nigeria’s logistics sector will remain a major impediment to economic growth.

They maintained that improving logistics efficiency is essential to reducing food inflation, strengthening supply chains, boosting agricultural productivity and unlocking Nigeria’s full economic potential.

Responding to concerns over road safety, Shehu Mohammed, corps marshal of the Federal Road Safety Corps (FRSC), assured stakeholders that the Corps remains committed to improving safety on Nigerian roads through strategic partnerships with private organisations and stricter enforcement of traffic regulations.

Mohammed said the FRSC would continue to intensify public enlightenment campaigns and enforcement activities aimed at reducing road crashes and enhancing safer movement of people and goods nationwide.