The peculiarity of the Nigerian market, coupled with its fluid nature, makes it essential to understand and work with the trend, issues, and challenges of logistics and supply chain management in this part of Africa.
There are huge opportunities in Nigeria, and these blind many to the risks of venturing into this market taking for granted profitable and legitimate transactions between established and reliable business institutions. Nigeria has a $385bn economy with nearly 200m population as market. So far, so good. The problem is logistics. For any organisation that wishes to gain or optimise existing market share in Africa, a creative and flexible approach to logistics and supply chain processes is very much needed.
How do you make a small fortune in Nigeria? Invest a large fortune without heeding logistics. Nigeria is an easy country in which to lose both perspective and money by those who take for granted, predictable, reliable and cost effective transport logistics, road and rail infrastructure, port and transit border operations. Moreover, the legal, financial and cultural structures of doing business in Nigeria across its sprawling borders are complex and variable involving over 250 different ethnic groups, and ways of doing business like nowhere else. For instance, informal cross-border trade (ICBT) is pervasive and has a long history given the region’s artificial and often porous borders, weak border enforcement, corruption, and, perhaps most importantly, lack of logistical super-structure that is easy to understand from the outside.
A common practice is the business relationships between local logistics agents and foreign companies. But you need to be flexible and adaptable in this business. Things change fast. Here is one example. As of this writing, Nigeria closed its borders with neighbouring Benin with enormous consequences for those who have established logistical paths, and a trail of goods imported legally and either legally re-exported to Nigeria, or illegally diverted into Nigeria from almost anywhere. Why has the government done this? Look here for opportunities. The project MINE is an initiative by the newly elected president to develop special economic zones and promote the goods that are made in Nigeria. For this reason, the government has prohibited the importation to focus on building local manufacturing and industrial capacity, giving a boost to the warehousing sector, which is of great importance to those who work the system of logistics in Nigeria, besides the varied opportunities that may arise by the unfolding mega-projects.
Here is an example of what is possible. The roads in Nigeria are rough and Lagos congested beyond belief. IT and Software companies experiencing major growth, and online e-commerce services are closely behind. But traffic congestion within major cities impacts operations. In some cities, including Lagos, there are restrictions on truck deliveries during the day, forcing deliveries to be made at night. The legendary traffic congestion in Lagos makes last-mile delivery particularly challenging for these firms, and orders are generally fulfilled using small vehicles such as vans and motorcycles able to weave their way through the traffic. “Pick-up stations” are offered as locations at which customers can collect their orders. Things are done differently here.
In this environment, it is vital to cement a working business relationship with associates who work the system as it is without complaints and with great success and profit. Our associates have invested both their time and their money in our training and screening program. We developed our network patiently and with care, much aided by Nigeria’s exceptional online infrastructure. We are in touch with clients 24/7, and have reliable and trained associates who know well customary procedures and business decision making within the many regions in Nigeria. Global competition increases, and logistics and supply management decision-making has become increasingly complicated everywhere these days. Nigeria is a market-opportunity for all its logistical shortcomings. The strength of our relationships and of our partner network gives us the flexibility to adapt to fluctuating products and circumstances quickly and efficiently.
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