The Logistics industry is a USD 4.3 billion industry globally. It is the backbone of trade and commerce especially in this era of cross-border transaction and ecommerce wave. Accordingly, logistics and related interventions have the highest potential to reduce the cost of trade and to boost integration in the global value chain.
The World Bank’s Global Trade and Regional Development Team publishes biennially (since 2007) a report, “Connecting to Compete: Trade Logistic in the Global Economy” that compares the performance of the logistic industry across over 160 countries. As with previous reports, the 2018 edition of the survey, reported the Logistic Performance Index (LPI).
The LPI is a comprehensive measure of the efficiency of international supply chains, and a unique benchmarking tool created to help countries identify the challenges and opportunities they face in their performance on trade logistics and what they can do to improve their performance.
The LPI is based on a worldwide survey of operators on the ground (that is, the global freight forwarders and express carriers), providing feedback on the logistics “friendliness” of the countries in which they operate and those with which they trade. They combine in-depth knowledge of the countries in which they operate with informed qualitative assessments of other countries where they trade and experience of global logistics environment. Feedback from operators is supplemented with quantitative data on the performance of key components of the logistics chain in the country of work.
The LPI is the weighted average of the country scores on the six key dimensions:
Efficiency of the clearance process (i.e., speed, simplicity and predictability of formalities) by border control agencies, including customs
Quality of trade and transport related infrastructure (e.g., ports, railroads, roads, information technology;
Ease of arranging competitively priced shipments;
Competence and quality of logistics services (e.g., transport operators, customs brokers;
Ability to track and trace consignments;
Timeliness of shipments in reaching destination within the scheduled or expected delivery time.
This implies that getting logistics right, means improving infrastructure, skills, customs and regulations, policies and governance at the right proportion.The scorecard demonstrates comparative performance of all countries (world), regional and income groups. We shall consider the position of Nigeria relative to other African countries, as well as her class categories in other region.
Overall Performance – select countries
The overall LPI score for Nigeria in 2018 was 2.53 a 3.80 percentage decline from the 2016 score of 2.63. The country average since 2007 is 2.57. Germany topped the list in 2018 with a score of 4.20 followed by three other European countries ahead of Japan and Singapore (Singapore topped the chart in 2012). Germany, topping the chart since 2014 has an average LPI score of 4.13.
The 2018 edition puts Nigeria below other African countries such as Kenya, Cameroun, and Ghana. Despite improvement in the sector following ecommerce boom and start-up wave, the score for Nigeria as well other the 5 other countries seem to be moderating since 2014 – except for the Gambia and Cameroun that underperformed in the previous survey.
South Africa seems to be the regional leader with an LPI score of 3.38 – albeit a decline from the 2016 score of 3.78. On the overall LPI, Nigeria ranks 110 out of a 160 countries – ahead of countries such as Zambia, The Gambia, Togo, Angola, Libya, Zimbabwe, and others.
Customs score
The custom score of the LPI shows the efficiency of the clearance process in terms of speed, simplicity and the predictability of formalities by customs and border control agencies. Nigeria had a custom score of 1.97 – the lowest since 2007. This emphasizes the informal, opaque processes at the ports and boarders. Compared to South Africa, Kenya and Ghana customs scores of 3.17, 2.65, 2.45 respectively, Nigeria shows relatively poor stand ranking 147 out of 160 countries.
Infrastructure score
Infrastructure score measures the quality of trade and transport related infrastructures such as ports, road, railways and information technology. Nigeria seems to have recorded some fair improvement on this measure. The record shows an increase to 2.56 in 2018 from 2.40 in 2016 and 2.27 in 2012. These changes can be attributed to the growing availability of internet and broadband network which has supported the rise in ecommerce in the country. The increased spending in road and railway infrastructure is also contributing factors. Interestingly, Nigeria ranks 78 out of 160 countries on infrastructure score.
International shipment
This score measures pricing options and price competitiveness of international shipping. Here the Score (rank) of 2.52 (110) in 2018 shows the rigidities in the pricing mechanism. This yet represents a worsening situation relative to the 2016 score of 2.43 (118). South Africa with a score of 3.51, ranking 22 shows a better standing on international shipment far ahead of Kenya with a rank of 99 and Ghana, 109.
Logistics quality
This compares the competence and quality of logistics services based on transport operators, customs brokers and other players in the chain. Nigeria scored 2.40 ranking 112 of the 160 countries surveyed. This shows a decline in the quality of services in the years before. In 2016, Nigeria posted a better score and rank of 2.74 and 74 respectively. Kenya went up the ladder this time to 64 and Ghana 90, South Africa at 36 however.
Tracking and tracing
The score of 2.68 and 92 reveals the level of technology and capability in tracking and tracing consignments in Nigeria. This is down from the 2016 levels of 2.70 and 82 in score and ranks respectively. Ranking 17 with a score point of 3.92, South Africa demonstrates capability as the regional benchmark.
Timeliness
This measures the timeliness of shipments in reaching destination within the scheduled or expected delivery time. Nigeria got her points up to 3.02 ranking 92 out of 160. It represents the highest score for Nigeria among other indicators and over the years since 2012. However, South Africa, Egypt, Benin and Rwanda were better regional performers.
