What Nigeria must do to fix its supply chain

Nigeria’s supply chain continues to struggle with infrastructure deficit, poor road networks, limited rail connectivity, port congestion, inadequate storage facilities, and regulatory inefficiencies, challenges that experts say are driving up costs and weakening the country’s competitiveness.

The system, which serves as a critical backbone for key industries such as agriculture and food production, pharmaceuticals and healthcare, e-commerce, manufacturing and exports, plays a central role in determining how efficiently goods move across the economy.

Supply chains act as the lifeline of the Nigerian economy, as they circulate resources, products, and value in industries whose operations are in the lives of the common man daily, according to a report by Rome Business School Nigeria.

The report, titled ‘Supply Chain Management In Nigeria: Trade, Industry Policy And Critical Infrastructure Opportunities,’ stated that these industries are united by the necessity to use effective logistics and infrastructure and cooperation between stakeholders, from small farmers in agriculture, to the flow of energy through the homes and industries in oil and gas, to the creation of tangible products in manufacturing, to life-saving drugs in pharmaceuticals and healthcare, to the shelves of stores and everyday needs in retail and FMCG.

Read also: Consistency, not cost, breaks supply chains in Nigeria

It, however, stated that opportunities in Nigeria’s supply chain environment are based on calculated strategy alignments, digital innovation, partnership models, and focused developments, which will help the country to surmount the thorny challenges and leverage its economic potential.

Here are five reforms Nigeria needs to fix its supply change system, according Rome Business School Nigeria

Digitisation and smart logistics

Digitisation and smart logistics offer Nigeria opportunities to improve the visibility and efficiency of the supply chain by using ERP implementation, blockchain, GPS monitoring, and integration with e-commerce.

Enterprise Resource Planning (ERP) systems allow controlling procurement, inventory, and distribution, and simplifying activities within enterprises.

Data sharing between stakeholders in real-time is possible, leading to improved coordination in multi-tier chains that minimise discrepancies.

Additionally, blockchain technology provides persistent records of traceability, secure transactions, and resistance to fraud in complicated networks.

Nigeria must digitalise its supply chain and tap opportunities embedded in smart logistics.

Public-Private Partnerships (PPPs)

Using public-private partnership as a means through which Nigeria can pool resources and expertise in terms of funding for infrastructure development, industrial parks, and logistics hubs is key to tackling bottlenecks in the supply chain.

PPPs that have collaborative funding models allow the government to harness the power of the private sector in terms of capital and operational experience in the swift development of essential assets that form the foundation of efficient goods movement.

The distribution of financial risks and alignment of projects to commercial viability and the interests of the population are necessary catalysts of infrastructural development.

In addition, PPP works in infrastructure projects by combining the public control of such projects and the efficiency of the private sector.

Read also: Unlocking Nigeria’s supply chains: The port-rail-water solution

Synergies in industrial policy

Nigeria’s industrial policy synergies take advantage of local content policy, backward integration policy, and empowerment of MSMEs in order to develop integrated and self-reliant supply chains that enrich domestic value addition and competitiveness.

The policies of local content require giving preference to suppliers and workers of local origin in the practices of procurement to stimulate local industries and limit the reliance on imports.

Backward integration plans also encourage companies to invest in the production of raw materials and the manufacture of intermediate goods, to reduce losses caused by the exportation of raw materials and fortify internal capabilities.

Investments in infrastructure

Investment in key infrastructure such as dry ports and port modernisation, road and rail rehabilitation, inland waterways, power, and ICT, is an opportunity Nigeria can use to revamp its supply chain management.

This investment will bridge the historic gaps with specific improvements in ports, roads, rails, inland waterways, power, and ICT.

Not only are these developments likely to simplify the logistics process, but they will also help to uplift communities by providing employment, enhancing access to goods, and helping to create economic inclusion among the common people of Nigeria, such as rural farmers who can enjoy better transport and urban families who enjoy reliable electricity.

Read also: Multimodal transport crucial to fixing Nigeria’s struggling supply chain, experts say

AfCFTA and trade policy reforms

The African Continental Free Trade Agreement (AfCFTA) and trade policy reforms provide Nigeria with significant opportunities to simplify operations and increase market access due to harmonised legislation and the leverage of the region.

Trade harmonisation entails the compliance of national regulations with AfCFTA guidelines, which minimises bureaucratic overlaps and makes cross-border flows easier. The AfCFTA potentials enable Nigeria to diversify its trading partners and become part of continental value chains.

With these reforms, policy coherence avenues are open, national trade frameworks facilitate commitments in the region, improving the reliability of the supply chain.