Report: Supply chain reform could unlock billions for Nigeria

Fixing Nigeria’s weak and fragmented supply chains could lift annual Gross Domestic Product (GDP) growth by between two and three per cent and unlock thousands of jobs across key sectors, a new report by Rome Business School Nigeria has said.

The report, released last month notes that efficient supply chains are central to connecting farms to markets, factories to ports and consumers to essential goods, warning that current gaps are costing the country billions of naira yearly.

Dean and Founder of Rome Business School Nigeria, Prof. Antonio Ragusa, described supply chains as “the backbone of modern economies,” stressing that their failure is felt most by ordinary Nigerians.

According to him, strengthening supply chains would improve access to food and medicines, support industrial growth and reduce over-reliance on oil.

The report traces Nigeria’s supply chain evolution from the colonial era of raw material exports, cocoa, palm oil and minerals, to the oil-driven expansion of the 1970s that reshaped trade and logistics around petroleum. 

While oil and gas still account for about 90 per cent of foreign exchange earnings, the report says the sector remains highly exposed to theft, vandalism and bureaucratic delays.

Beyond oil, Nigeria exports over $1.5 billion worth of cocoa and sesame annually. However, poor logistics, limited local processing and weak linkages between farmers, processors and exporters continue to erode value and limit the country’s agricultural potential.

Infrastructure deficits were identified as a major constraint. Of Nigeria’s estimated 195,000 kilometres of roads, only a small fraction is paved, pushing transport costs up by as much as 40 per cent and increasing final consumer prices by nearly 30 per cent.

Security challenges also weigh heavily on supply routes. Banditry in the North and vandalism in the Niger Delta frequently disrupt the movement of goods, endanger logistics workers and raise the cost of doing business.

The report further highlights the impact of the 2023 fuel subsidy removal, noting that the sharp rise in transport and logistics costs has strained supply chains and contributed to higher prices of essential goods.

Although the COVID-19 pandemic accelerated the adoption of digital tools such as e-procurement and online inventory systems, the report says Nigeria still lags in advanced technologies like artificial intelligence and blockchain. High costs, weak broadband infrastructure and a shortage of skilled professionals have limited uptake, particularly among small and medium-sized enterprises.

Despite the challenges, the report identifies significant opportunities. It points to the African Continental Free Trade Area (AfCFTA), projecting that intra-African trade could grow by over 20 per cent with improved logistics cooperation, customs processes and infrastructure. Emerging trends such as city-based warehousing, electric delivery vehicles and green logistics were also highlighted as cost-saving and growth-driving options.

Ragusa said Nigeria has the resources, market size and talent to transform its supply chains, adding that coordinated action to modernise infrastructure, adopt technology and build resilience is now critical for inclusive and sustainable growth.

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