BusinessDay

Tech start-ups drive change for Nigerian truckers

Until a year ago, Friday Ighodaro spent three or four nights a month getting pulled out of his 30-tonne Steyr truck on the unlit highways of rural Nigeria by armed robbers. They know that long-haul truckers carry cash advances for provisions along the way, he said.

Until a year ago, Friday Ighodaro spent three or four nights a month getting pulled out of his 30-tonne Steyr truck on the unlit highways of rural Nigeria by armed robbers. They know that long-haul truckers carry cash advances for provisions along the way, he said.

“Nowadays in Nigeria when you carry money, it’s very dangerous,” he said. Bandits prowl the roads across the country, “but now when they stop you on the road when they see the Honeywell sign, they know we don’t carry cash.”

Mr. Ighodaro is an owner-operator who hauls grain to every corner of Nigeria for Honeywell Flour Mills and other clients of Kobo360, a 20-month old start-up which announced earlier this month that it had raised $30m in debt and equity in a funding round led by Goldman Sachs.

The company uses an “Uber for logistics” model to connect drivers and fleet operators to companies bringing goods into and around

Africa’s most populous country, and also Togo, Ghana, and Kenya, as it attempts to bring a cashless, app-based paperless system to an industry mired in reams of paperwork and handshake relationships.

Where many drivers might get 30 percent of their pay upfront in cash from traditional trucking companies — for food and fuel en route — Kobo pays them 70 percent on starting the trip, directly to their bank account. Drivers can then use payment apps on their phones to pay for food or use a Kobo service to buy discounted fuel at petrol stations via their phones.

Its operations became all the more relevant last month on the signing of a landmark continentwide free trade deal aimed at bolstering Intra-African trade, which sorely lags that of the rest of the world.

Mr. Ighodaro signed up with Kobo a year ago and has not had to hustle for business in the crowded truck depots of Lagos since. He and his fellow drivers — Kobo said it has signed up more than 10,000 — have also not had to wait in the notorious, winding line that leads to Lagos’s main ports. Kobo provides its drivers with a lift via barge to its customers located inside the port.

“Tin Can [in Lagos’ port] is the hardest place to move goods in the world — the hold-up for days, the soldiers extorting money from drivers in line,” said Goni Gombe, whose family fleet of 60 trucks has seen business triple in the year since it signed up with Kobo. “But now we can go in and out.”

Rail system unchanged since colonial times

Shoddy infrastructure is one of many challenges — along with insecurity, inefficiency, corruption, poor-quality trucks and high fees — that make logistics among the biggest obstacles for businesses trying to make it in Africa’s largest economy and across the continent.

Most African countries rank near the bottom of the World Bank’s annual logistics performance index because the system is rife with inefficiencies. Shipping a container from China to Lagos is sometimes cheaper than moving one from the Lagos port to the other side of the city, said Obiora Madu, head of the Nigeria-based African Centre for Supply Chain.

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