Simplifying regulatory framework for logistics can attract more businesses, create jobs, says Dokubo  

Sein Dokubo is a chartered procurement and supply chain manager with almost a decade of experience spent on some international projects across Africa and the United Kingdom. In this interview with ADAKU ONYENUCHEYA, he talks about the opportunities in Nigeria’s logistics and transport industry notwithstanding the apparent challenges. 

Logistics and transport are some of the fastest-growing industries with the potential to contribute massively to the GDP of a nation. Nigeria has one of the largest markets in Africa, yet the potential of the sector remains untapped, which could be seen in the 2023 Logistics Performance Index (LPI) by the World Bank which ranked Nigeria 88th out of 139 countries assessed. How can Nigeria leverage this huge potential and generate revenue from this sector instead of borrowing and compounding the woes of unborn Nigerians?
The logistics and transport sector indeed holds immense potential for economic growth in Nigeria. The country’s strategic location, large population, and vibrant market create a fertile ground for leveraging logistics to boost GDP.

However, to capitalize on this potential, we could look at it through different lenses. Socially, the need for improved infrastructure: roads, railways, seaports and airports cannot be over-emphasized as these are the gateways to seamless transportation. Politically, we need to simplify regulations, offer investment incentives, and implement trade facilitation measures focusing on targeted political reforms. Technologically, I am technology-inclined, so I would encourage embracing digital tools and data analytics to optimize logistics operations. My master’s degree is in Logistics and Supply Chain, and I was trained in one of the best schools in the world— actually, it was the Logistics Operation Centre during WW ll and I saw firsthand how technology could improve day-to-day business operations.

Time won’t permit me to discuss other potentials such as regional integration through ECOWAS protocol and developing Regional Transport Corridors to enhance cross-border trade. I mean, these are some of the steps that if taken will unlock the sector’s potential, create jobs, generate revenue, reduce the need for external borrowing and foster long-term economic growth.

What are the challenges limiting the growth and potential of the logistics and transport sectors in Nigeria and how can this be addressed to improve efficiency?
Just like every other sector in Nigeria, the logistics and transport sector faces several challenges that slow down its growth and potential. I will mention a few of these challenges and possible solutions to improve efficiency. Poor Infrastructure Development. As regards roads and bridges, Nigeria’s road network spans approximately 195,000 kilometers, with about 30 per cent of federal roads in poor condition. This results in high transportation costs and delays. For rail network, the Nigerian railway system covers around 3,500 kilometers, but less than 20% is currently operational due to outdated infrastructure. For Ports and Airports, Nigerian ports face significant congestion, with the Apapa port in Lagos operating at over 150% capacity, leading to long wait times and inefficiency.

Secondly, political, regulatory and bureaucratic hurdles. Some of these hurdles include complex procedures. It takes an average of 20 days to clear goods through Nigerian ports, compared to the global average of seven days, due to bureaucratic bottlenecks. Also, corruption. Nigeria ranks 154th out of 180 countries on Transparency International’s 2023 Corruption Perceptions Index, indicating a high level of corruption affecting business operations.

Thirdly, inadequate technology adoption. This includes a lack of digital solutions. Only about 30% of logistics firms in Nigeria use advanced tracking and automation systems, limiting efficiency. On cybersecurity risks, the rate of cyber-attacks in Nigeria has increased by 25% in the past two years, posing risks to digital logistics infrastructure.

I do not want to mention security issues, insufficient human capital-skills gap, environmental and sustainability concerns, etc. because these are very present problems, and we are all too familiar with them. However, it’s not all dark and gloomy; there are ongoing policies and works in place that if they are executed successfully, might just be the solutions we have been looking for. I know that there are plans in place to invest over $3 billion in road and railway projects by 2025 to improve connectivity and reduce transportation costs. The government has initiated the Deep Sea Port project at Lekki, expected to increase port capacity by 50% upon completion in 2024- this year. Also, they are implementing single-window systems for customs and the expectation here is to reduce clearance time by 40%.

On the technology side of things, the adoption of GPS tracking and warehouse automation is projected to increase by 50% by 2025, driven by government incentives. For cybersecurity measures, investing in robust cybersecurity frameworks can reduce the risk of cyber-attacks, protecting critical logistics data. For training programmes, the Logistics and Transport Management Institute estimates a need for 200,000 additional skilled workers in the sector by 2025 and the Government and private sector are collaborating to train 50,000 logistics professionals by 2025 which leaves us with a gap of 150,000 additional skills however, it’s a good start.

I am positive that Nigeria can unlock the full potential of its logistics and transport sectors, driving significant economic growth, creating jobs, driving down the crime rate and reducing reliance on external borrowing amongst others.

There is the issue of the multiplicity of taxes from state and non-state actors ruining the logistics business. How can the industry be regulated for efficiency?
I will provide a very short answer to this as I do not want to go down this rabbit hole, we all know that the multiplicity of taxes from state and non-state actors remains a significant hindrance. That said, an efficient regulation requires harmonizing tax policies across states, akin to Singapore’s centralized tax framework, to attract investment and streamline operations; this is as simple as it gets.  Well, I will leave the tax issue to the taxation professionals.

Nigeria’s unemployment rate is increasing daily, especially with a large number of graduates churned out of our higher institutions yearly with no jobs available. The President Bola Tinubu administration’s Renewed Hope Agenda focuses on creating jobs in the ICT sector. How can the logistics and transport industry help to bridge this gap?
As you are aware, Nigeria faces a growing unemployment crisis, with the rate reaching 33.3% in 2023. Each year, approximately 600,000 graduates enter a job market alas there are no jobs for most of them. While the Renewed Hope Agenda by President Bola Tinubu focuses on job creation in the ICT sector, the logistics and transport industry also holds significant potential for job creation. We can improve and expand roads, railways, ports, and airports to create thousands of jobs. For example, the ongoing Lagos-Ibadan railway project has already created over 10,000 jobs during its construction phase, unfortunately, some of these opportunities will be given to expatriates. Now, I have so much respect for expatriates and foreigners but it’s a shame that companies in Nigeria still employ less-educated foreign workers as opposed to our well-qualified home-grown engineers and other professionals. It might interest you to know that most of our unemployed youths do not have the chance to even land a job as unskilled labor in some companies. This is not because they are not qualified but because these jobs are already given to “expatriates”, isn’t that amazing?

The adoption of technology in logistics, such as GPS tracking, automated warehouses, and data analytics, requires IT professionals and technicians. This sector can absorb a portion of the 600,000 yearly graduates, especially those with ICT skills and trained unskilled employees on the job. Remember 95% of jobs can train employees on the job.

There is currently an e-commerce boom in Nigeria, with e-commerce growing at 20% annually, companies like Jumia and Konga and now Amazon need logistics support for their operations. This growth drives demand for tech-savvy logistics personnel and can address growing unemployment just like Amazon is doing in the U.S. and other parts of the world.

Again, I am back to my point on policy and regulation, why can’t we just ease the regulations of doing business in this country – simplifying the regulatory framework for logistics can attract more businesses to the sector, which in turn will create jobs.

Furthermore, by introducing reforms that reduce bureaucratic delays and streamline tax policies can make it easier for companies to operate and expand.  We have all witnessed the exit of major companies like P&G-Pampers, Kimberly-Clark, ExxonMobil, and Guinness Nigeria transitioning underscores the urgent need to stabilize the business environment.

Do you think we have enough qualified manpower and capacity in the transport and logistics industry, or it is an all-comers affair? How can the industry be regulated to avoid accidents that have been occurring in the trucking system?
I do not think so; there is no gainsaying that only a few sectors in Nigeria can boast of having qualified manpower.  Focusing on the transport and logistics industry, less than 10% of Nigerian universities offer specialized courses in logistics and supply chain management. This shortage in formal education contributes to the lack of qualified manpower. In my opinion, solving this problem is a quick win. I worked for one of the biggest industrial supplies companies in North America and they have a business model that addressed unqualified manpower significantly and we should start enforcing companies to replicate the same here in Nigeria. Not only do they bring in unskilled labour at a very young age and let them grow within the system to become managers, but they have a Business School that gives you actual credit from on-the-job training courses taken within the company. Now, employees could use these credit points to get course waivers in conventional universities.

The good news here is that some companies in Nigeria are catching up. For instance, the driver training initiatives. Companies like Dangote Group have established driver training schools to improve the skills of their truck drivers. In the area of technology adoption, firms such as Kobo360 are using technology to manage their logistics operations, ensuring better safety and efficiency.

Agreed that Nigeria currently faces a skills gap in the logistics and transport sector, however, I am convinced that there are clear pathways to develop a more qualified workforce through education, professional development, and government initiatives.

As an expert, what are you bringing to reshape the industry in Nigeria? Should we expect innovation soon?
This is a very good question. I’d say anticipate innovations enhancing efficiency and sustainability because this is where the world is going. As an industry expert, some of my large-scale initiatives aim to modernize Nigeria’s logistics, such as AI for route optimization and blockchain for transparent supply chains, promising transformative impacts (even for the health sector). I tried not to mention the Nigerian health sector that would benefit greatly from the Transport and Logistics industry if we get it right.

Nonetheless, by embracing these strategies and innovations, Nigeria can unlock the full potential of its logistics and transport sectors. This approach fosters economic growth, job creation, and sustainable development, good healthcare, and positioning Nigeria as a regional leader in logistics excellence.

As an expert who has vast knowledge in Nigeria and other countries, what strategies have worked over there, that Nigeria needs to implement?
I will say by adopting lessons from successful global models and tailoring them to local realities because Nigeria is very peculiar. These strategies not only enhance efficiency and reliability but also stimulate economic growth, create job opportunities, and contribute to sustainable development. Government commitment, private sector innovation, and community involvement are essential for implementing these strategies effectively and ensuring long-term success in Nigeria’s logistics and transport industry. Quick examples are Australia’s vocational training programs and certifications for logistics professionals ensure a skilled workforce capable of managing complex supply chains and we could adopt this too, with enough training in GSM repairs, and Tie & dye experts (not saying that these are not good skills) but we must have a paradigm shift at this point.

Another one is Singapore’s business-friendly environment – with streamlined regulations and efficient processes. This approach minimizes bureaucratic hurdles, encourages investment and attracts global players to the country. What is stopping us from making this work? Just to mention the Netherlands’ successful use of PPPs in developing transport infrastructure, such as ports and highways. It echoes the point that collaboration between government and private sectors can accelerate infrastructure development. I could go on and on but let me stop here.

Technology is a game changer; how can this help shape and enhance logistics and transport operations in Nigeria? How would you also rate the existing technology deployed to assist the movement of haulage to and from the port to the last mile?
Technology is indeed a game changer, using Kenya as an example: Kenya’s mobile technology revolution in logistics, exemplified by services like M-PESA for payments and mobile-based tracking systems, has enhanced supply chain visibility and efficiency.

I must say that Nigeria’s tech sector is very vibrant, with startups like Kobo360 (I must have mentioned them a couple of times already) but they are using digital platforms for freight logistics. However, broader adoption of technologies like GPS tracking and drone delivery for the last mile are still opportunities that are to be explored.  I am working with a Nigerian who is leading a Drone Project for the City of Newark in New Jersey. Again, we need such talents back home to help our technology sector.

The world is going green, what strategies can be implemented to reduce the environmental impact of logistics and transport activities in Nigeria?
There is a growing demand for eco-friendly logistics solutions. Training graduates in green logistics can open up new job markets. Companies like GIG Logistics are already exploring electric delivery vehicles and sustainable packaging. Nevertheless, implementing green logistics, including electric vehicles and sustainable packaging, aligns with global environmental standards. For instance, Kenya’s embrace of renewable energy in transport reduces carbon footprints, setting benchmarks for Nigeria’s sustainability efforts.

What opportunities and challenges do you see in the growth of e-commerce and last-mile delivery in Nigeria?
At the risk of repeating myself, E-commerce growth presents opportunities but also challenges like infrastructure gaps and regulatory complexities. Nigeria can learn from China’s Alibaba, which streamlined logistics with technology, overcoming similar hurdles. Truth be told, Nigeria can overcome these challenges. We just need the right people in place to spearhead the needed change.

Some youths do not value logistics and transport business as their dream jobs as some see it as demeaning to their academic qualifications. What advice would you give to these young people as well as new companies or professionals entering the industry today?”
Logistics and Supply Chain is not a popular discipline. I still have to explain to people what I went to school for and what I do. So it will only take time but it’s a very admirable profession and I would encourage youth to consider it. I am working on an initiative to improve skills alongside creating sensitization on the profession, more especially encouraging more women representation.