The Freight and Logistics market in Nigeria is segmented by Function (Freight Transport, Freight Forwarding, Warehousing, Courier, Express, and Parcel, Value-added Services, Cold Chain Logistics, Last Mile Logistics, Return Logistics, and Other Emerging Areas) and by End-User (Construction, Oil & Gas and Quarrying, Agriculture, Fishing, and Forestry, Manufacturing & Automotive, Distributive Trade, Others (Pharmaceutical and Healthcare).

Logistics is vital for the economic performance of any economy. Nigeria has poor infrastructure and logistical issues along with delayed customs procedures and congestion on the roads. It is an import-based country and the economy is dependent on the export of crude oil. Nigeria was ranked 145 out of 190 economies in 2018 in ease of doing business Index and ranks 112 in the Logistics Performance Index (2018)

Road transport is the most commonly used mode of transportation in Nigeria today. Road traffic depends on the pattern of human settlements, accounting for more than 90 percent of the sub-sector’s contribution to the Gross Domestic Product (GDP).

The logistics and supply chain sector are one of the fastest-growing industries in Nigeria, though still in its nascent stage. As of 2018, the value of Nigeria’s logistics sector was estimated to be 250 billion naira ($696 million), a rise of 50 billion naira ($140 million) from 2017 figures. This was according to the 2018 Logistics and Supply Chain Industry report as reported by Vanguard.

In 2018, Nigeria was ranked 145 out of 190 countries in its Ease of Doing Business, and 112 in the Logistics Performance Index.

The current growth in Nigeria’s logistics is due to infrastructure development in railways and airways, improvement in ties with other countries, development in manufacturing and export sectors, and the rise of e-commerce.

Nigeria’s bilateral and multilateral agreements with various countries, along with its involvement in initiatives such as ECOWAS and AGOA are expected to improve trade and grow the sector. With the African Continental Free Trade Agreement, Nigeria now has free access to the entire African market thereby improving the trade between the neighboring countries and impacting the logistics sector in the future.

Due to the recession in 2016-17, the GON banned access to foreign exchange for the import of 43 products with the aim of boosting local manufacturing and industrial units, as well as supporting the agricultural sector, which requires a functioning logistics network to boost the nation’s economy. The project MINE is an initiative by President Buhari’s administration to develop special economic zones and promote the goods that are made in Nigeria. The first round of funding will concentrate on developing Funtua Cotton Cluster, Enyimba Economic City, and Lekki-Epe Model Industrial Park in Katsina, Abia, and Lagos State respectively. This will increase the domestic demand as well as exports in the market giving a boost to the warehousing sector.

Given the huge presence of industrial parks and the proximity to seaports and airports, the majority of the warehouses are situated in Lagos. With the developing manufacturing industry and increasing demands for logistics, some companies have entered the sector recently like Dangote, Vicampro Farm, BlackPace, and Kiremko.


The Nigeria Special Economic Zones Investment Company is currently raising capital of $250 million from various lenders to develop free trade zones in Katsina, Abia, and the Lagos States which will fill the supply-demand gap in the economy.

Nigeria is also expected to build the Lekki Lagos Airport on a 3,000-hectare plot. The Lekki Deep Sea Port project at a budget of $1.5 billion is currently underway with an anticipated Phase 1 completion of 2022.  The hope is that once completed the new development will decongest the traffic around the Apapa seaport and open up additional logistics routes within the Lagos metro area.

The e-commerce sector is also expected to experience exponential growth given the investments generated by direct and third-party logistics operators within the sector to boost the courier and parcel market in Nigeria.

Online shopping trends in 2019 showed that the fashion industry led with a transaction volume of $1.76 billion and a user penetration of 52.2%. This is expected to reach 75.2% by 2023. With the ease of payments through mobile money, debit cards, electronic wallets, and other payment modes increasing, internet penetration is expected to help this sector grow further and give a boost to the logistics and freight market.

SOURCE: Nigeria – Logistics Sector

Leave a Comment

Your email address will not be published. Required fields are marked *