Nigeria lacks a coherent strategy to manage freight – How to get there
Nigeria’s transportation network is largely in a state of disrepair due to inadequate investments over decades, economic and population growth, and ineffective policies and plans.
For example, the ports of Tin Can and Apapa in Lagos continue to suffer from inadequate cargo handling equipment. This causes costly delays. And when the goods finally clear customs, the lack of rail connectivity forces them to be transported on poor and congested roads to the northern and eastern parts of the country.
These factors often lead to accidents, breakdowns and additional delays. All of them are damaging to the economy.
Such inefficiency is despite a series of national transport policies. Reforms were launched in 2003, 2008 and 2010. These paid some attention to the possibility of intermodality – ensuring that goods transported by truck are transferred by rail or by water, and again to the truck for final delivery. These reforms also took into account privatization and public-private partnerships. However, none of these policies and reforms made a significant difference.
The costs associated with inefficient and inefficient national transport and logistics systems are well documented. The International Trade Administration, an agency of the US government, citing a survey by the Lagos Chamber of Commerce and Industry, showed that the Nigerian economy is losing an estimated income of 3.46 trillion naira per year.
Nigeria connects to the global and regional economy through international maritime and air transport, while its internal connections are primarily through road and rail movements. With this in mind, any freight logistics plan for the country should be seen as part of a global supply chain network.
In my opinion, the time has come to seriously consider a comprehensive and holistic national freight logistics strategy for Nigeria for the next decades.
It would bring together all levels of government and industry to provide a coordinated national multimodal approach to freight planning. And it would meet Nigeria’s freight challenges, while supporting its long-term international competitiveness.
As a seasoned logistics analyst, consultant, scholar and educator in the developing and developed worlds, I have encountered a range of relatively effective national freight logistics strategies such as those in South Africa, Panama, Vietnam and Thailand.
They provide useful benchmarks for what is possible.
Why the plans didn’t work
First, transport has traditionally been the subject of constant government attention. But logistics and supply chain management are often seen as a private business activity.
The public authorities should pay much more attention to it, especially with regard to its integration into trade and the economy.
Second, policymakers always take a piecemeal vision and approach. This is clear from the fact that there are a number of disparate plans that affect transport. These include Nigeria’s Integrated Infrastructure Master Plan which was put in place in March 2015 by the National Planning Commission. And then there is the Economic Recovery and Growth Plan which was approved by the government in 2016 for execution from 2017 to 2020.
Likewise, there are several monitoring agencies. For example, air transport alone has three – the Nigerian Airspace Management Agency, the Nigerian Civil Aviation Authority, and the Federal Airports Authority of Nigeria – but none are focused on freight.
A piecemeal approach results in insufficient integration of commercial and economic considerations in the design, operation and management of the national transport system. The result is poor logistics and supply chain management.
What the plan should cover
A well-developed freight logistics strategy must be integrated and comprehensive. It should facilitate the safe and efficient movement of goods within the country. It would also integrate the country seamlessly into the West African sub-region and beyond.
The plan should address the sources of freight production, the flow of goods and the associated data-based modeling. It should also cover the transport and distribution industry and workforce, the principles of storage and warehousing location, and the movement of bulk cargo, containers and general cargo through major ports, airports, inland dry ports, transport corridors and intermodal terminals.
In addition, the plan should cover access to rail, access to seaports and access to air freight to enable efficient access to bulk freight to support agricultural regions, production hubs, industries. local, businesses and consumers.
Finally, the strategy should address the compatibility of standards, platforms and data and information systems. This would ensure smooth interactions between trading partners and carriers, as well as the introduction of modern and productive freight technologies. South Africa, Panama, Thailand and Vietnam are some examples that Nigeria can learn from.
How to get there
A national freight logistics strategy like this would be different from the myriad of existing government plans and policies. For example, it would reduce transaction and coordination costs for freight operations and the economy as a whole.
The policy can be developed through systematic freight research based on specific data and other evidence from stakeholders. This may include a series of nationwide surveys on the priorities of national freight and supply chains.
Other relevant data and information can be gathered through partnerships with industry and broad non-partisan consultations.
Each country has its own problems. A thorough and representative consultation process would therefore be crucial.
An in-depth mapping exercise should also be carried out.
Freight networks and hubs are made up of multiple visible and invisible economic, social and political connections. These combine to provide an efficient working system and must be identified.
For example, Lagos and Kano are single-center hubs. This means that the freight has to be trucked from or to the outskirts of the urban sprawl and from other parts of Nigeria at a high cost. And with difficulty. A decentralized national system with multiple hubs across Nigeria would make much more sense. This would allow logistics facilities and infrastructure to be located closer to the main sources of freight production and consumption, and closer to the main transport corridors.
This would make the transport of goods less dependent on the ports of Lagos. In turn, this would ease the pressure on the transport networks. This has positive implications for efficiency, productivity, transport emissions, noise reduction and social equity.
We should therefore consider several other hubs apart from Lagos, Kano, Port Harcourt and Abuja. For example, Enugu-Onitsha can serve as a freight hub to support manufacturing and trade, while Makurdi or a similar middle belt town can serve as a hub for the region’s food-producing regions.
Overall, an audit must be carried out to identify regulatory, economic or environmental issues. Skills and geography should also be part of the picture.
Nigeria’s current approach to freight movement is fragmented. It needs a single point of national responsibility.
Although the current focus on road infrastructure projects is good, an integrated approach to freight logistics and supply chain management would be preferable.
Logistics is not as attractive to senior politicians as simple road building. It is therefore struggling to attract political attention. But this is no reason why the country does not pursue an integrated national freight logistics policy.
Richard Oloruntoba, Associate Professor of Supply Chain Management and Head of Supply Chain Management, Curtin University