IMPLICATIONS OF DIFFICULT LOGISTICS ECOSYSTEM

Infrastructure decay and logistics procedure inefficiencies are affecting the nation's economy. Most manufacturing companies are relocating from Nigeria.

These relocations extract capital, employment opportunities, and skills development. Manufacturing plants are running at half their intended capacity given the reallocation of certain brands to Ghana or Cote de-Ivoire. However, this is not a referendum on the economy, but rather a reaction to pressure from its business environment.

Nevertheless, the economy is taking the heat; imported products are becoming cheaper than locally made products, medium-scale manufacturers are struggling to compete, local supply chains are shrinking and unemployment is firing into space.

The recent economic recession is attributed to several factors including foreign exchange and oil price volatility, ill-articulated reforms, institutional dysfunction, and public sector corruption.

Further assessment should be commissioned to correctly identify the contributions of inefficient logistics procedures and poor logistics infrastructures to the economic underperformance observed.

Nonetheless, recovery will require restoring investor confidence; and the state of Nigeria's logistics ecosystem will play a huge part. Nigeria is gradually diversifying its economy. The focus on agriculture and services is visible. Still, the current state of infrastructure and inefficient processing of haulage will not assist that agenda. 53% of farm produce is destroyed — at the farm gate and in transit.

To put that in context, during the last administration, Anambra State conducted internal poverty mapping; it was clear that well-being and livelihood (in the state) were determined — in a huge part — by access to soft/hard infrastructure. Following on that mapping, it invested massively in rural roads, sub-urban infrastructures, and other access initiatives. Six years after intervening, another assessment showed staggering improvement in the well-being and livelihood of farming-based rural communities that had performed poorly in the initial poverty mapping. Arguments that infrastructure development and access initiatives alone were not responsible, for the outcome, are legitimate. Nevertheless, their introduction allowed other development components to be applied productively. There are underdeveloped clusters in several locations and states across the country.

Nonetheless, the development of such clusters, linking their capabilities, and integrating them formerly into the economy will require an efficient network of infrastructure support. Harnessing the capability of cluster markets will provide new employment opportunities, create opportunities for innovation, and strengthen Nigeria's global competitiveness.

IMPLICATIONS OF CHEAP OIL AND LOGISTICS ON NEW INVESTMENTS

In the end, domestic and foreign Investors value and understand the economic potential of Nigeria.

However, capturing the largesse of this market from a long-term investor point of view must follow due diligence. Analysts believe that cost-benefit analysis and risk modeling conducted for potential investors are focused extensively on logistics and infrastructure performance: as part of supply chain risk-inputs that threaten business continuity in Nigeria. This kind of negative scoring and other dysfunctional national attributes dampen investor appetite for the economy.

Exploration and production of oil and gas is relatively cheap in Nigeria compared to countries like the United States and Canada. However, ubiquitous production - from nontraditional producers and the European Union's interest in alternative sources of energy means the time of $120 Per barrel of crude oil is over (for now). Hence, the nation needs to look Inward to address logistics infrastructure and operational challenges to provide Nigeria much the required socioeconomic facelift. public sector actors should formulate a robust logistics optimization roadmap, Including innovative financing in partnership with multinational and private investors.

Nigeria has a huge economy. Investing in the economy comes with massive ROI. Yet, globalization is cheap oil. Asian labor practices and rising East African nations have raised the stakes. Nigeria needs to upgrade to compete. Investors still regard the economy as a gateway into Africa. Nevertheless, in a cheap oil economy, any long-term investor will want to map/analyze the nation’s critical economic pillars; and logistics infrastructure/network capability could be the deciding factor.

Written out from my book on Logistics Solutions and National Infrastructure Development.