Manufacturers demand better transport system to cut logistics cost

Manufacturers say speedy completion of railways and development of all transport routes will help reduce cost of production and increase price competitiveness of their products.

According to them, an economy desirous of indstrialisation must have a good transport network that will move raw materials to factories and products to consumers. They say a good railway system in the country, for instance, will cut costs and integrate the economy, adding development of sea transport system will help real sector players that are facing logistics challenges.

“One of the major costs we incur is transportation,” said Frank Udemba Jacobs, president, Manufacturers Association of Nigeria (MAN) in a telephone interview.

“Rail is usually cheaper than other modes of transportation and I believe if we have it here, there will be reduction in costs,” Jacobs said.

He further said Nigeria can never get enough of other modes of transport, adding that it is also critical to develop the waterways as this would widen the reach of producers.

In a recent economic blueprint sent to Buhari, Jacobs had said that in view of the centrality of the rail system to the growth of internal trade and industrial competitiveness, manufacturers would recommend that rail modernisation should be accelerated.

Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), told BusinessDay earlier that a diversified and well-developed transport system could solve one critical problem of the real sector, which is logistics.

“One of the biggest problems the economy is facing is logistics and a key factor is transportation. This is affecting virtually all the sectors, from agriculture to industry and trade. If we are able to develop the rail system, there will be enhanced productivity and reduction in the cost of doing business,” Yusuf said.

He added that the rail system would integrated the domestic economy, thereby giving investors hopes that Nigeria is serious about diversification.

Other analysts who spoke with BusinessDay said this would reduce cost of production and help Nigerian exporters compete favourably in the global market.

ODINAKA ANUDU