By Merit Ibe
The escalating crisis in the Middle East has not only tightened its grip on Nigeria’s already strained logistics chain, it has exposed deep structural weaknesses and pushed trade costs sharply higher.
As key global shipping routes like the Strait of Hormuz and Gulf of Aden face disruptions, it has led to stranded vessels and reduced cargo capacity on West African routes, despite Nigeria having no direct involvement in the conflict.
Consequently, delivery timelines have lengthened and import-dependent sectors are under tremendous pressure. Experts warn that Nigeria’s heavy reliance on external corridors, coupled with port inefficiencies and weak inland transport networks, is amplifying the impact. The result is a cascading effect on businesses and consumers, with rising prices, delayed cargo, and growing uncertainty threatening trade flows and economic stability.
They noted that these shocks highlight Nigeria’s vulnerability as a country heavily dependent on international shipping. With fewer containers available, importers and exporters are grappling with rising shipping costs, scarcity of equipment, and increased financial burdens. Analysts estimate that inefficiencies in the logistics sector result in supply chain leakages of up to 30 to 40 percent of GDP annually.
Beyond global disruptions, domestic challenges such as insecurity, poor infrastructure, and weak coordination across transport systems continue to worsen the situation. Rising insecurity has disrupted the movement of goods, weakened investor confidence, and increased operational risks across multiple sectors.
Experts also argue that Nigeria’s logistics sector holds the key to unlocking export potential under the African Continental Free Trade Area (AfCFTA). Efficient ports, rail networks, and roads would enable faster movement of goods, reduce costs, and improve the competitiveness of Nigerian exports. Reducing delays at major ports such as Apapa Port is seen as critical to achieving this goal.
Improved logistics would also benefit small and medium-sized enterprises by enhancing access to markets across Africa. With better warehousing, cold chain systems, and digital tracking, businesses can maintain product quality and expand exports to countries like Ghana, Kenya, and South Africa.
On the policy side, stakeholders emphasize the need for digitalisation to reduce delays and corruption. Automated customs systems and cargo tracking technologies would improve transparency and align Nigeria with global trade standards.
Stakeholders agree that Nigeria’s logistics challenges stem from both external shocks and internal weaknesses. To address them, they recommend developing indigenous shipping capacity, modernising ports, investing in rail-linked corridors, and implementing system-wide bureaucratic reforms.
They also stress that government alone cannot drive the transformation. Instead, public funds should act as a catalyst to attract private investment, supported by policy consistency, transparency, and efficient governance.
Ultimately, experts warn that without building a complete export chain, from production to processing, logistics, and market access, Nigeria’s participation in global and regional trade frameworks will remain limited. However, with the right reforms, the country can turn its logistics sector into a powerful engine for economic growth, trade expansion, and regional leadership.
Trade expert and former director general, Nigerian Association of Chambers of Commerce Industry Mines and Agriculture (NACCIMA), John Isemede said Nigeria’s core problem lies in poor execution rather than lack of policies.
“We lack integrated logistics, functional export systems, and a coordinated trade strategy. While we belong to ECOWAS, WTO, and AfCFTA, our participation has produced minimal results due to weak infrastructure, poor planning, and overdependence on raw exports,” he said.
He added that without a connected multimodal system linking road, rail, ports, and airports, trade agreements would remain “theoretical rather than transformational.”
Isemede stressed the need for export hubs, modern warehouses, and aggregation centres, questioning whether Nigeria has effectively connected its transport systems. According to him, “exports are not just sending goods out; it is a full chain,” which Nigeria has yet to fully develop.
“Since independence, Nigeria has focused more on policies than performance.
“We lack integrated logistics, functional export systems, and coordinated trade strategy. While we belong to ECOWAS, WTO, and AfCFTA, our participation has produced minimal results due to weak infrastructure, poor planning, and overdependence on raw exports.
“ Until we build a connected multimodal logistics system, develop value-added products, and align policy with execution, trade agreements will remain theoretical rather than transformational.”
For effective trade Isemede said logistics and Infrastructure problems must be tackled.
“Nigeria belongs to many groups but has little measurable success.
ECOWAS trade is very low (around 5%), AfCFTA has been signed, but no strong export strategy and AGOA was underutilized for 25 years.”
He decried export weakness, adding that foreign markets prefer value-added products, arguing that Nigeria has standards capability, but not applied well.
“Weak export capacity, poor policy execution, over-reliance on raw exports, failure to leverage trade agreements, government dominance without private sector efficiency,” he said have been the challenges to trade growth.
He advised that Nigeria should build export hubs (warehouses, silos), connect rail to ports to airports, develop specific export products, fund market research across Africa, empower private sector, not just government.
Isemede viewed that government dominates trade strategy instead of enabling businesses, adding that bad policies push Nigerian companies to relocate.
“Companies move to Benin Republic, produce there and re-export into Nigeria duty-free under regional agreements.”
He pointed out the shipping and logistics gap, noting that no national shipping strength, leading to high cost of exports, weak coastal trade (no strong intra-African shipping routes).
“Nigeria cannot succeed in global trade without building a complete export chain—from production to processing, packaging, logistics, and final markets.
“ Today, we export raw materials and import finished goods, while our policies push local industries to relocate to neighboring countries. Trade agreements like AfCFTA and WTO mean nothing without infrastructure, standards, and market development.
“The government must set measurable targets, empower the private sector, and develop domestic markets first. Until then, our participation in global trade will remain theoretical, not practical.”
Similarly, Project Lead, Calabar and Gulf of Guinea Municipal and Trade Centre Ltd by Guarantee, David Etim, pointed to Nigeria’s heavy reliance on foreign shipping lines as a major vulnerability.
“We are the one part of the world that has no control over its shipping, especially West Africa. That’s why external shocks hit us harder,” he said.
Etim explained that while global freight costs rise for everyone during disruptions, countries with stronger logistics systems are better able to absorb the impact, unlike Nigeria.
He noted that inefficiencies in road transport further increase final costs. “Maritime dominates international trade, but inefficient road logistics increases final costs significantly,” he said, adding that underdeveloped rail systems force Nigeria to rely heavily on expensive road transport for inland movement.
“In terms of maritime logistics, Nigeria is totally dependent on foreign shipping lines and West Africa generally lacks strong indigenous fleets.
“Now, road transport here looks very busy, but in the proportion of trade, road transport is only carrying about 15% of the total trade.
Events in places like the Gulf of Aden or Strait of Hormuz affect freight rates worldwide.
Now, because we are totally dependent on international shipping, we feel it more in Nigeria.
“These costs are globally transmitted, but countries with stronger systems absorb them better.
Nigeria feels it more because there is no national fleet buffer, weak port efficiency, poor inland transport alternatives.
On the AfCFTA, Etim said it is powerful in theory, but poor roads, limited rail networks, port congestion, high logistics costs show that Nigeria and West Africa are not fully ready to benefit.
“AFCFTA is a fantastic concept for trade. However, because of the huge infrastructure deficit, whether roads, land logistic movement, rail network for cost-effective logistics connectivity, or port facilities, we are like 50 years behind in our infrastructure needs in West Africa, Nigeria included. So playing catch-up requires a lot of investment. And the federal government of Nigeria, speaking specifically to the issue of Nigeria, does not have that kind of money.”
He pointed to the bureaucratic inefficiencies in Nigeria’s governance structure, which destroy whatever value could have been derived.
“Shipping cost is high, import cost is high, but businesses adapt and the final consumer pays.
This ties directly to inflation and declining purchasing power.
Nigeria’s vulnerability is not just external dependence, it is internal weakness and external shocks.”
To fix it, Etim said Nigeria needs indigenous shipping capacity (even regional); port modernization; rail-linked logistics corridors; bureaucratic reform (speed and accountability) among others.
He cited examples like United Arab Emirates that succeeded because systems are automated, processes are predictable, and personal connections are irrelevant.
He proffered that the ease of doing business should permeate all MDAs, not selected ones.
Right now he said ministries operate in silos, no unified service standard, no accountability across the chain as such businesses get stuck moving from one agency to another.
“Reforms in Nigeria are too selective instead of system-wide, and that’s why impact is limited.”
He noted that bad local roads, poor grassroots service delivery, weak implementation directly affect logistics costs, agricultural supply chains and small business survival.
Etim also believes that inefficiency at the ward/local level quietly damages the entire economy.
He suggested that the government cannot fund development alone.
Public funds should act as a catalyst, not the main driver, he said.
“Nigeria is not attracting that 85% private capital due to policy inconsistency, bureaucratic delays, weak execution of funded projects.
“So even when concessional funds come from institutions like the World Bank, Projects stall, confidence drops, private investors stay away.
“Nigeria’s problem is not lack of ideas or funding alone, it is the absence of a coordinated, efficient governance system.
“Ease of doing business must move from being a ranking exercise to a governing philosophy, applied across all ministries, all states, and down to local governments.
“Until government systems work seamlessly, private capital will remain cautious, and the full benefits of reforms will never be realized.”
While improving security is critical to attracting investment, Etim noted that it is only one part of a broader equation. Investors also require policy consistency, strong contract enforcement, stable exchange rates, and transparent regulation.
Security serves as the foundation upon which infrastructure development, reduced insurance costs, and long-term investments can thrive. “However, without institutional reforms and effective governance, these gains may not materialize fully. A coordinated national strategy that combines security, efficient systems, and private sector participation is essential for sustainable economic growth and resilience.”
Dr Boboye Oyeyemi, President and chairman of council, Chartered institute of Logistics and Transport, Nigeria, described the logistics sector as being at a defining crossroads.
“Building a competitive logistics ecosystem is not merely an economic priority; it is a national security and sovereignty imperative,” he said, noting that inefficiencies cost Nigeria up to 40 percent of GDP annually.
“With Africa’s largest economy, a population exceeding 241 million and a geographic position as the continent’s commercial hub, Nigeria possesses the raw materials for a logistics revolution.
“Yet inefficiencies cost the nation an estimated 30 to 40 percent of GDP in supply chain leakages annually.”
Oyeyemi said building a competitive logistics ecosystem is not merely an economic priority, it is a national security and sovereignty imperative.
Logistics matters now because Nigeria must leverage the AfCFTA to expand non oil export and diversify revenue streams.
“For economic diversification, industrialisation agenda, population dividend and digital economy growth.”
He lamented that infrastructure, road, rail and ports, which are the physical backbone of logistics are critically underdeveloped ..
He recommended that Nigeria must improve on human capital and skill development to build professionals who will drive the Nigeria logistics revolution.
To build Nigeria logistics future, he proffered collaboration between federal and state governments; private sector and investors; professional bodies development partners academia and research.
Adelana Olamilekan, Chairman, Logistics Committee, NBCC, emphasized that Nigeria must strengthen its maritime systems to fully harness the advantages.
He said the solution is not in drawing new maps of the nation, we already have those in abundance.
“The real answer lies in how effectively we convert potential into performance.
“The maritime and logistics sector is not merely a support function; it is a critical engine room of the economy. Every delay at the ports, every inefficiency in cargo movement, and every inconsistency in revenue collection directly impacts national productivity and global competitiveness.
“If we are truly serious about building the future, then minor adjustments will not be enough. What is required is a fundamental shift from fragmentation to coordination, from isolated efficiency to system-wide performance, and from working in silos to integrated action.”
The Postmaster General and Chief Executive Officer of the Nigerian Postal Service (NIPOST), Tola Odeyemi, noted that Nigeria is at a crucial stage in redefining its logistics and trade architecture. She emphasized that the efficiency of the maritime and logistics sector has a direct impact on trade flows, cost of goods, and overall economic performance.
Odeyemi said NIPOST is repositioning itself beyond traditional postal services to play a more active role in last-mile delivery, e-commerce logistics, and national distribution networks. She explained that the agency’s vision is to build a technology-driven logistics backbone that supports businesses, particularly SMEs, and strengthens Nigeria’s participation in regional and global trade.
“As we all recognize, addressing longstanding challenges, ranging from port congestion and infrastructure deficits to regulatory inefficiencies, is not optional; it is imperative.”
Leave a comment