There is an urgent need for better regulatory framework, unification of policies and the establishment of good infrastructure to spur the logistics sector of Nigeria and help it serve its rightful purpose of making commerce and life in general easier.
Key players in the sector made the submission at the BusinessDay Technological Disruption in Logistics conference in Lagos, Tuesday.
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Morolayo Igeleke, of United Parcel Service (UPS) Nigeria; Mbanefo Obiora, CEO of Yoris Africa Ltd; Obinna Anyaegbu, the executive director, Chisco Group and Olusola Obabori, the group executive director, International Business & Corporate Services, NAHCO Plc — all panelists at the conference — agreed that the logistics landscape in Nigeria has done well with technology adoption, especially given the position of every other ingredients needed for the sector to continue its tech-enabled evolution.
About the effect of tech so far in the sector, Mbanefo underscored a significant hurdle: a mere 10 percent adoption of technology among Nigerian SMEs, highlighting the pressing need for advancements in this vital sector.
Mbanefo as well as other experts on “The role of Technology in the logistics Business” panel emphasised the prevailing infrastructure challenges that hinder the seamless integration of logistics as an independent third-party service.
Mbanefo said that despite being touted as one of Africa’s technology leaders, the industry in Nigeria grapples with hurdles such as concentrated smartphone adoption in urban areas, hindering logistics expansion to the rural areas.
Mbanefo also said that entrepreneurs needs to set the agenda by creating the structures and frameworks in other to give the government what to regulate.
Igeleke, from UPS, highlighted UPS’s integration of robotics and AI at their data hub in Germany, streamlining package handling and minimising human interaction for enhanced efficiency. Despite the successes abroad and locally, Igeleke said challenges persist especially in Nigeria, notably in power supply and internet connectivity.
“The sensitivity of robotic systems necessitates uninterrupted 24/7 power, posing difficulties in a country where power supply is inconsistent. Additionally, internet connectivity issues persist, particularly in remote locations with limited access to telecom services,” Igeleke ta0said.
Igeleke pointed out significant opportunities arising from the ongoing telecommunications expansion in Nigeria. Despite the current statistics indicating that only 68 percent of rural dwellers use online payments, there is a growing demand for this service. He says the key lies in creating awareness, informing people of available alternatives, and encouraging them to embrace the convenience of online services.
Igeleke also said that the shift in awareness presents opportunities for telecom companies and FinTechs to innovate continuously. As people realise the potential of handling tasks like sending packages to distant locations with a simple app click, the demand for FinTech applications and telecommunications services is on the rise.
The logistics industry plays a pivotal role in facilitating the movement of goods and services, serving as the backbone of global trade.
In the aspect of streamlining regulations to enhance the logistics industry’s viability, Olusola Obabori, said that the logistics is often hindered by an excessive regulatory framework that impedes its growth and efficiency.
In particular, the courier service segment faces a complex licensing and taxing structure involving multiple layers, including “thugs,” which adds unnecessary bureaucracy and administrative burdens to businesses. This fragmented regulatory landscape stifles innovation and hinders the sector’s ability to adapt to evolving market demands.
Igeleke added that there is an urgent need for a robust and comprehensive registration system for logistics businesses. This system should employ a combination.
He said the current system often relies on reactive measures, such as periodic audits and spot checks, which fail to comprehensively identify and address unregistered or non-compliant businesses.
“This lack of proactive enforcement allows unlicensed operators to operate in the shadows, potentially compromising the quality of services,” Igeleke said.
The panelists expressed optimism for the future of Nigeria’s logistics sector. With the government’s commitment to infrastructure development and increasing awareness of technological possibilities, the nation is poised for a better-connected and technologically advanced future.