The Promising Future of Nigeria’s Logistics Sector

Logistics services are now an integral part of everyday life in major cities across Nigeria, with businesses and individuals using delivery vans and bikes to pick and deliver items. Years ago, these activities were few and far between. Today's boom in the logistics business can be safely attributed to the growing online shopping trend spurred by e-commerce companies. More items are being ordered online and businesses have to offer timely delivery to consumers irrespective of location.

In addition, investment in logistics networks by e-commerce brands is also opening up the market for startup entrepreneurs and SMEs to thrive. For example, Jumia opened its logistics network to third party businesses in 2020 which further boosted Nigeria's logistics market. 

"We started as a ticketing company; we were supposed to be a flight company till we moved into logistics. As of 2018, was the investment worth it? Absolutely no. We started, and we had roughly about 400 packages being delivered in a month. And time after time, I will question my decision to start a business like this. I remember vividly at a time I could barely pay salaries. I had to ask my wife to join the business to manage things. But I kept on believing that this was going to pay off one day. In 2018, I decided to try Jumia by opening a hub with Jumia. Has it paid off? Definitely yes. Last year, we did 14,000 packages in July," said a Jumia Logistics Partner, Segun Babs, Founder of Fairytrips Limited. 

The story of Fairytrips Limited is one of many SMEs in different regions of the country who have been able to upscale their businesses by leveraging partnerships. According to Chidi Anyina, Founder of ACOA Courier, strategic partnerships drive growth and employment opportunities in the sector. "We started off doing about a hundred orders every other day, but we did 17,000 orders in June alone last year. We have been with Jumia for the past 8 years, and we started in a boys' quarters of about two rooms, with just a bike, a van and two other staff. Now, we have graduated to having about 37 staff spread across Lagos and Aba. But most importantly, we've impacted the community; we're like the biggest employer of labour in Festac Town," he explained.

Recently, we have seen more collaboration between foreign brands and top logistics players in the Nigerian market. Within the last two months, two global logistics brands announced partnerships with Jumia to boost their trade in Nigeria and across Africa. "UPS's asset-light approach, like the Jumia partnership, offers a pathway for SMEs in Africa to quickly and reliably connect to new customers around the world through our global network," said UPS vice president of engineering and operations for Indian subcontinent, Middle East and Africa, Gregory Goba Ble.

4PX Global cross-border E-commerce Product Director, Derek Wang, said, "Our collaboration with Jumia enables 4PX to strengthen our global network and enrich our service offerings. It also solidifies our brand image as one of the world’s strongest global logistic companies." 

The rise and use of e-commerce platforms in recent years has shown that logistics can be a significant contributor to Nigeria's GDP and overall economic growth.