Nigeria’s ports handle only 1.6 million containers annually, a figure far below the country’s trade potential when compared to peers like Indonesia, according to logistics expert, Mohammed Akoojee.
The CEO of DP World Sub-Saharan Africa, says inefficiencies across Nigeria’s supply chain are stifling economic growth and inflating product costs, emphasizing the urgent need for technology-driven reforms.
Speaking with Nairametrics, Akoojee, noted that Nigeria, despite having over 200 million people, the same population size as Indonesia, handles just a fifth of the containers moved by the Asian nation.
“1.6 million containers annually is far less than Nigeria’s potential. This is not because there is no demand for trade in Nigeria,” Akoojee explained.
“The real issue is logistics inefficiency, from port delays to congested roads, to high transport costs. These bottlenecks add unnecessary costs to the consumer. Technology and infrastructure upgrades are critical if Nigeria wants to reach its true trade potential.”
High Cost of Logistics Hurting Growth
According to him, logistics cost as a percentage of GDP in Nigeria currently account for nearly 15% of GDP, almost double the global average of 6–8%. In some cases, logistics can make up to 75% of the value of a product, making goods unaffordable for many consumers.
“Such a system is not sustainable,” Akoojee said. “DP World is investing heavily in port infrastructure, warehousing, and distribution networks to reduce inefficiencies.
He said with effective logistics services, distribution, and leveraging technology, the cost can be driven down, and goods can be made more affordable.
Investing in Technology: AI, Blockchain, and Data
Akoojee said DP World is also betting on technology to transform African trade, adding that the company is rolling out artificial intelligence, blockchain, and remote-operated terminals to improve transparency and efficiency.
“With over 8,000 trucks, multiple terminals, and more than a million square meters of warehousing across Africa, we generate vast amounts of data,” Akoojee explained.
“AI allows us to analyze this data, predict trends, and price logistics services more accurately. This is how we can give Africa a competitive edge in global trade.”
Outlook: Nigeria’s Long-Term Potential
Despite challenges, Akoojee remains bullish on Nigeria. He says the company has been in the country for 15 years and it is here for the long haul.
“Foreign direct investment thrives on stability and predictability,” Akoojee noted. “Nigeria’s recent fiscal and monetary reforms are starting to rebuild investor confidence. With over 200 million people today, and projected to be the world’s third-largest population, Nigeria’s consumer market is simply too big to ignore.”
What You Should Know
- Earlier in the week, Minister of Blue and Marine Economy, Adegboyega Oyetola, projected the Lekki Port to unlock $200 billion in revenue for the government over its 45-year concession period.
- He explained that since the port commenced commercial operations, the challenge associated with port congestion has been easing both in Lagos and other ports, while simultaneously enhancing Nigeria’s competitiveness as a logistics hub.
