The supply chain management and logistics sectors are rapidly growing in Nigeria, though they are still evolving in critical aspects.
However, recent developments, such as the removal of petrol subsidies and the unification of the foreign exchange market, have significantly impacted the cost of doing business in this sector.
The removal of fuel subsidies, with the goal of reducing the fiscal deficit and attracting foreign investment, has led to a substantial increase in petrol prices, soaring from an average of N162 per litre to approximately N630 per litre.
This price surge, coupled with inflation and currency depreciation, has substantially raised transportation costs for both commuters and businesses.
As of 2020, Nigeria ranked 131st out of 190 countries in the Ease of Doing Business Index and 110th in the Logistics Performance Index.
The growth in Nigeria’s logistics sector can be attributed to several factors, including improved infrastructure in railways and air transport, international partnerships, manufacturing and export growth, and the proliferation of e-commerce and logistics applications.
However, this growth is accompanied by challenges, such as significant infrastructure deficits, obstructive government policies, inadequate road networks, unreliable electricity supply, pervasive corruption, and a complex tax structure.
These issues often lead local stakeholders, grappling with financial difficulties, to pass on these costs to end-users, affecting competitiveness.
In response to these new macroeconomic challenges, logistics companies, like dispatch riders, have raised their fares by 100%.
While e-commerce is a driving force in the logistics sector, the growth of online sales has expanded opportunities for these companies.
Despite infrastructure gaps, some companies are persevering to provide services for Nigerians.
These businesses not only create jobs but also contribute to the economy by improving the delivery of goods and services.
In keeping with Nairametrics’ tradition, we introduce you to the leaders and founders of prominent logistics companies that are fueling growth and empowerment in Nigeria’s expanding economy in 2023.
