Logistics operators in Nigeria are struggling to overcome old problems despite government reforms, with the sector facing an estimated N3.2 trillion annual loss due to transport inefficiency. At a recent conference in Lagos, transport operators highlighted the persistent infrastructural gaps that are squeezing their operations and threatening the competitiveness of the sector.
Obiora Madu, director-general of the Africa Centre for Supply Chain, noted that disruption has become the order of the day with back-to-back disruptions caused by factors such as currency fluctuations and environmental disasters. Madu said the cost of moving goods is high due to delays at ports and on the road, which are exacerbated by fragmentation in the processes.
Fragmentation and Delays
Ifeanyi Onwuachu, managing director of Janksmay Global Services, blamed fragmentation for much of the delay, citing separate procedures used by shipping lines, terminal operators, and customs. This fragmentation leads to unavoidable delays, which result in losses for freight forwarders and ultimately affect every Nigerian.
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The National Single Window, designed to unify some of these processes, is still in its first phase, with the launch of the second phase promised for November this year. However, operators are concerned that the current system is insufficient, with Madu noting that shipping lines grant importers only 21 free days, which is not enough time to clear goods due to truck delays and paperwork.
Madu also highlighted the issue of truck delays, citing the example of 7,000 trucks queuing for berths on a Lagos ring road designed for 2,400 trucks. He noted that 40 percent of total port cost comes from accumulated truck delays, which is a significant burden for operators.
Fuel Costs and Infrastructure
Fuel is now the heaviest single input for many operators, with prices reaching record levels due to the removal of subsidies. Buchi Ochuba, head of business operations at Chisco Transport and Logistics, said that the company buys diesel at almost N2,000 per litre and has started sourcing its own supply due to unreliable third-party supply.
The high fuel costs are inflating operational costs and freight costs for businesses, with Madu noting that up to 45 percent of trade value is lost to freight costs and inefficiency. He also cited the example of a 56-seater transport bus whose price has doubled to N300 million from N150 million in just two years due to the high cost of maintenance caused by bad roads.
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According to an SBM Intelligence report, over 60 percent of Nigeria’s 108,000-kilometre road network suffers from disrepair, costing billions annually in lost productivity and shortened vehicle lifespans. Mildred Ekanem, executive director of Lagride Nigeria Limited, noted that the bad roads are making maintenance of expensive vehicles almost inevitable, regardless of their lifespan.
Ochuba complained that a journey that should take 12 hours sometimes takes 36 hours due to detours and breakdowns, which burn extra fuel and increase costs. Onwuachu also noted that the roads are wearing out his vehicles fast, saying that if the roads survive four years, it would be a miracle.
As the logistics operators struggle to cope with these challenges, they are calling on the government to address the issues of infrastructure, fragmentation, and taxation. Kayode Opeifa, managing director of the Nigerian Railway Corporation, said that the state of the sector comes down to government investment in infrastructure, noting that the private sector will never invest if the government does not.
Operators are planning to press their case, with Opeifa intending to meet with officials from the Nigerian Shipping Council and the Nigerian Ports Authority, along with freight associations, to address logistics costs.
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Meanwhile, the federal government had promised logistics operators lower taxes with the introduction of a new tax regime in early 2026. Taiwo Oyedele, the minister of finance, had assured players in the industry of relief when the new tax laws take effect in January 2026, but industry players insist that the promise is yet to be fulfilled.
The Nigerian logistics industry, where more than 90 percent of goods are moved by road, has faced double taxation, with haulage and logistics companies encountering over 200 legal and hidden taxes along highways. The industry is hoping that the government will address these issues and provide relief to operators who are struggling to cope with the challenges of doing business in Nigeria.
For now, logistics operators like Onwuachu are left to deal with the consequences of these challenges, including the cost of maintaining vehicles and the impact of delays on their business. As Onwuachu noted, the roads are wearing out his vehicles fast, and he has over 30 trucks that have been on the road for the past 15 days, incurring detention notices and additional costs.
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