By Fruzzy Wuzzy
Nigeria’s logistics industry has continued to play a crucial role in the nation’s economy, contributing about ₦1.003 trillion, representing 3.73 percent of the country’s Gross Domestic Product, GDP, in 2024.
The contribution, which includes both the formal and informal segments of the sector, highlights the growing importance of logistics to trade, commerce, and national development.
According to industry data, the formal logistics segment accounted for ₦535.5 billion of the total contribution, while the informal sector added about ₦468.4 billion. This shows that even though many operators in the informal space are unregistered, they remain a key part of Nigeria’s supply chain network.
Road transport remains the dominant mode of goods movement in the country, contributing ₦425.8 billion to GDP. However, the rail and maritime logistics sectors together contributed less than 0.33 percent, reflecting the slow development of alternative transport modes.
Stakeholders have, however, expressed concern over the challenges facing the sector, such as poor road infrastructure, high operational costs estimated at about 40 percent, and overlapping regulatory issues. They noted that these challenges continue to hinder the efficiency and growth of the logistics value chain.
Experts have called on the Federal Government to prioritize infrastructure development, improve regulations, and integrate informal operators into the formal economy to boost performance.
They further emphasized that addressing these challenges would help reduce logistics costs, enhance Nigeria’s trade competitiveness, create more jobs, and strengthen the country’s overall economic resilience.
With proper policy direction and sustained investment, analysts believe Nigeria’s logistics sector has the potential to contribute far more to GDP and align with global standards for efficient and sustainable trade operations.
This transformation would position logistics as a cornerstone of Nigeria’s economic growth and competitiveness
Part of the report reads:””The logistics industry is essential for fostering economic development in Nigeria, acting as a fundamental support system for trade, commerce, and industrial operations.
As the largest economy in Africa, Nigeria depends on its logistics framework to enable the transportation of goods, services, and individuals throughout its varied regions and to global markets
“The contribution of logistics to Nigeria’s GDP underscores its critical role in bolstering vital sectors such as agriculture, oil and gas, manufacturing, and retail.
” Well functioning logistics systems help to lower expenses, enhance Logistics effectiveness, and boost competitiveness in both domestic and international markets.
“Although the sector faces obstacles like inadequate infrastructure, elevated transportation costs, and regulatory challenges, it continues to be an integral part of Nigeria’s economic landscape.
“The agricultural sector significantly impacts Nigeria’s GDP, and the logistics infrastructure is vital for its support.
“Both crop and livestock production play crucial roles in Nigeria’s economic advancement, with the logistics sector being indispensable for the distribution of these agricultural products to local and international markets.
“The manufacturing sector constitutes a crucial element of Nigeria’s economy, with the logistics sector playing an indispensable role in bolstering this industry.
” Research indicates that both industrial output and employment significantly contribute to economic growth in Nigeria. Well-functioning logistics systems can improve the competitiveness of Nigerian manufacturers in local and international markets.
“The oil and gas sector serves as a major engine of Nigeria’s economy, with logistics being vital for the efficient transportation of these resources to both domestic and global markets. The logistics infrastructure is essential for the movement of raw materials, finished goods, and personnel within the oil and gas sector.
“Additionally, the retail sector is a significant part of Nigeria’s economic landscape, with logistics being critical to its operations.
“Effective logistics systems can lower costs, enhance Logistics efficiency, and improve the competitive edge of Nigerian retailers in both local and international arenas.
“Despite the logistics sector’s vital role in Nigeria’s economy, the country encounters numerous challenges that impede the growth and advancement of this industry Issues such as inadequate infrastructure, elevated transportation costs, and regulatory hurdles are among the primary obstacles faced by the logistics sector in Nigeria. By addressing these challenges through focused investments and policy reforms, the full potential of the logistics sector could be realized, thereby contributing to the nation’s economic development.
“In summary, the logistics industry plays a crucial role in Nigeria’s economic structure, making substantial contributions to the nation’s GDP by facilitating essential sectors such as agriculture, manufacturing, oil and gas, and retail. “Well-functioning logistics systems have the potential to lower expenses, enhance Logistics effectiveness, and boost the competitiveness of Nigerian enterprises in both local and international markets .
“Tackling the obstacles that the logistics sector faces, including inadequate infrastructure and elevated transportation costs, could fully realize the industry’s potential and support Nigeria’s economic advancement and development.
“The logistics industry is essential for stimulating economic activities and facilitating trade, thereby serving as a vital contributor to a nation’s GDP. “This sector includes various elements such as
transportation, warehouse, logistics management and other associated services The performance and effectiveness of logistics operations can significantly influence a nation’s economic outcomes.
“The significance of the logistics sector in relation to GDP has been extensively documented across different economies. For instance, research indicates that the efficiency of logistics can have a favorable effect on the economic growth of the Commonwealth of Independent States (CIS) nations.
“The Nigerian government is currently engaged in extensive investments aimed at enhancing logistics infrastructure, particularly focusing on roads, railways, airports, and seaports, in collaboration with private sector partners. This strategic partnership is anticipated to generate a multiplier effect on the national economy by improving logistics effciency, fostering job creation, and promoting overall economic growth. Key initiatives, such as the Lagos-Ibadan Expressway, Lagos Rail Mass Transit, and the ongoing port developments in Lagos and Calabar, are integral to this strategy, alongside the recently initiated Lagos-Calabar coastal highway and the Sokoto-Badagry super highway, which are making significant progress.
“By facilitating improved mobility of goods, these initiatives are expected to elevate economic production levels, ultimately contributing to an increase in the Gross Domestic Product.
“Nigeria needs transport infrastructure to drive economic growth. Transport industry includes road, rail, air and maritime transport. Yet these modes are underserved, due to poor infrastructure and poor repair of existing ones as indicated in table 2.2 and 2.2a The degraded state of road infrastructures becomes a serious challenge which creates congestion, crashes and higher transport costs.”
Dr. Obiora Madu, Director General of African Centre for Supply Chain and President of Association of Outsourcing Professionals (AOPN) said that the informal segment of Nigeria’s logistics industry may have contributed more to the economy than the formal sector, describing the industry as “a gold mine waiting to be fully tapped.”
He noted that with proper regulation, investment, and data-driven planning, the logistics sector could generate more revenue, create jobs, and play a greater role in driving national development.
