The need to scale Nigeria’s motor park logistics

Motor park logistics refers to the seamless interplay of last-mile logistics infrastructure crucial for the effective collection, storage, delivery, and dispersal of goods and services. These “last-mile” motor park infrastructure include an array of road and railway networks, airports, seaports, warehouses, dry ports, harbors, and many other trade structures.

Nigeria’s dire need to scale its motor-park logistics system and bolster its trade sector couldn’t be more glaring. Trade makes up almost a quarter of Nigeria’s entire economic output, and in 2021 trade accounted for 22.58% of Nigeria’s Gross Domestic Product (GDP).

It has also been estimated that the novel African Continental Free Trade Agreement (AfCFTA)—the world’s largest free trade agreement by participating countries—can lift 30 million Africans out of poverty and raise the living incomes of 68 million other Africans who subsist on less than $5.50 per day. Indeed, it has been summed up that one out of every five persons of African origin is from Nigeria, so a massive improvement in the economic lot of 30 million Africans will roughly affect 6 million Nigerians.

For Nigeria to join the league of the most industrialized economies in the world, it will have to rapidly grow and scale its motor-park logistics outlay

For Nigeria, these are some reasons the country needs to scale its motor park logistics:

1. Seamless motor park logistics is fundamental to economic growth

Seamless motor-park logistics remain the backbone of every industrialized economy. Logistics represents about 10.7% of the Gross Domestic Product (GDP) of the United States economy, amounting to about $85.24 trillion. In the Asia-Pacific region, the market size of the logistics sector is worth about $3.9 trillion, and the region’s shipping industry is highly sophisticated, leading to a volume of 41.5 million TEUs (Twenty Equipment Units) in 2021.

For Nigeria to join the league of the most industrialized economies in the world, it will have to rapidly grow and scale its motor-park logistics outlay. The World Economic Forum (WEF) confirms that logistics performance remains central to economically viable countries’ economic growth and competitiveness and that the logistics sector is a core pillar of economic development.

By commissioning the newly built $1.5 billion Lekki Deep Seaport and a 32-metric ton per-hour rice mill in Lagos, the Muhammadu Buhari presidency has significantly committed to scaling Nigeria’s logistical infrastructure. However, the country have to work more earnestly. Lucid economic plans that carefully detail how investments in motor-park logistics can be developed will have to be rolled out by Nigeria’s federal government and other sub-national bodies. Enabling regulation and business-friendly regulators for investment in motor park logistics must also be pursued.

2. Seamless motor-park logistics can rapidly lift Nigerians out of poverty

In its Multidimensional Poverty Index Report launched in November 2022, the Nigerian Bureau of Statistics (NBS) stated that 132.9 million Nigerians were entangled in some form of “multidimensional poverty” or the other. Citing unemployment, insecurity, poor access to education and health standards, and a general fall in living standards across the country, the bureau exposed the sad reality of how about 62.9% of Nigerians live below unacceptable economic lines.

Indeed, Nigeria cannot continue to accept poverty as an economic lot of its teeming populace. And this is where a sophisticated motor park logistics industry, through smooth trade systems, can come to play. Without an efficient supply chain, trade is impossible. Yet, trade fuels economic growth, creates jobs, and raises the general standard of living, providing families with the goods and services they need to live nourished lives. At the heart of trade in Nigeria is motor park logistics. Therefore, the nation must develop this motor-park logistics industry to enjoy the immense benefits. Some critical motor-park logistics that must be developed are its road network and railway system.

Economic experts have concluded that Nigeria may lose about N500 billion because of the dysfunctional commercial freight railway system linking goods at the Apapa ports to other parts of Nigeria. It is time to remedy this defect and avoid the unnecessary loss.’

Read also: Trends that will shape logistics and global supply chains in 2023

3. Seamless motor park logistics can help Nigeria trade better with its neighbours

Following the ratification of the African Continental Free Trade Agreement (AfCFTA), Nigeria now sits on a glorious opportunity to be the “food basket” of Africa if it wants. Indeed, while many of the 54 African countries are richly blessed with arable land and the intellectual know-how necessary for successful agricultural enterprise, only a few African countries have their destinies in their hands with food security.

Africa’s wheat imports increased by 68% from 2007 to 2019. African countries imported over 16.6 million metric tons of rice between 2020 and 2021 alone, with most of the rice imports headed for sub-Saharan Africa. Fittingly, some economic observers have concluded that Africa has a significant challenge with feeding itself after sub-Saharan maintained a food import bill of more than $43 billion in 2019 alone.

The dietary needs of African countries can not always be sought from outside the continent through unsustainable import bills, which is where Nigeria can play a critical agricultural role. It can take full advantage of the AfCFTA by exporting much-needed agricultural products to other parts of Africa, beginning with its next-door neighbors, Benin and Ghana. However, to do that, Nigeria must improve its motor park logistics industry because the AfCFTA presents a remarkable opportunity to turn its status around, from a major net importer of food to a major net exporter of food to other African countries.

Conclusion

Trade remains a veritable source of boosting foreign exchange inflows, improving the economy, balancing the national budget, and raising the national standard of living.

For Nigeria, a well-oiled and developed motor park logistics industry will facilitate internal and cross-border trade, and can help lift people out of poverty.