Strengthening Nigeria’s Distribution System to Transform the Digital Economy

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By Elvis Eromosele

Recently, I had the task of sending prescription glasses in a case to Benin City. After considering all the available options, it became clear that taking it to a park and paying one thousand naira was the best way to get it delivered, on the same day. It was cost-effective, and timely and ensured that I met my goal.

I spoke to a driver, he very reluctantly revealed that he made, on average, N12, 000.00 daily, from, “help me deliver this”. Imagine this: one driver in one park makes an average of N12, 000.00 daily. Multiply this by the number of drivers in that one park, over 50 times the number of interstate transport parks across Lagos and then across the country. We’ll be talking billions of naira monthly boosting the informal sector (we should talk about this soon).

Now imagine the various types of commodities that are packaged and transported through this process. The potential is immense. The opportunity is boundless.

I suspect that the park drivers may have effectively taken the market from formal courier service providers. So, while courier firms are battling with the federal government (through the regulator, NIPOST), the market is whittling away. This is the definition of disruption.

At the core of distribution is transportation. As more and more people, especially young people, take their businesses online the need for an effective distribution system grows. Horses for courses. This is essential if goods must get to the hands of the final consumer. This is where the money will be made.

The government talks about growing the digital economy, creating jobs and improving the ease of doing business. It must now back up the talk with real-life and real-time support for the distribution and logistics sector. It is a sector that holds tremendous opportunities for socioeconomic transformation.

It’s not only individuals that need functional distribution systems. Multinationals, public corporations and in fact, everyone needs to deliver something somewhere at some time.

The system that makes this work effectively cannot remain haphazard and disjointed. It cannot depend exclusively on “help me deliver this”. It needs the power of synergy and coordination. It requires structure and organisation. It must be nourished and harnessed.

In today’s digital economy, distribution and logistics are crucial to ensuring that goods and services are delivered to customers quickly and efficiently. You will agree with me that the rise of e-commerce has fundamentally changed the way we buy and sell products, and this has led to a greater need for effective distribution and logistics systems.

At its core, the digital economy is all about speed and convenience. Consumers expect to be able to order products online and have them delivered to their doorstep within a matter of days, or even hours in some cases. This means that businesses must be able to move goods quickly and efficiently through the supply chain, from the point of manufacture to the end customer.

Distribution and logistics play a key role in making this happen. These systems are responsible for coordinating the movement of goods and ensuring that they arrive at their intended destination on time and in good condition. They are also responsible for managing inventory levels, tracking shipments, and handling returns and exchanges.

One example of the importance of distribution and logistics in the digital economy can be seen in the rise of same-day delivery services. With companies like Amazon and Walmart in America offering same-day delivery in many major cities, there is a growing need for distribution and logistics systems that can deliver products quickly and efficiently. Jiji, Jumia and Konga are pioneering similar initiatives across the African continent. This requires a combination of advanced tracking and routing technology, as well as a network of distribution centres strategically located throughout the country.

Nigeria is a country with a large population and a growing economy. With a diverse range of industries, from agriculture to manufacturing to technology, there is a need for a robust and efficient distribution network to ensure that goods and services are delivered to customers in a timely and cost-effective manner. Nigeria can strengthen its distribution network through these simple steps:

Improve Infrastructure: Nigeria’s road, rail, and port infrastructure are in dire need of improvement. Poor roads and largely outdated rail networks make it difficult for goods to be transported quickly and efficiently across the country. The government needs to invest in upgrading and modernizing its infrastructure to improve the movement of goods.

Encourage Private Investment: The government should encourage private sector investment in logistics and distribution. This can be done through tax incentives, grants, and other forms of financial support to help businesses expand their distribution networks.

Embrace Technology: Nigeria can also strengthen its distribution network by embracing technology. This includes the use of digital platforms to streamline operations and improve supply chain visibility. By using technology, businesses can track shipments, manage inventory, and optimize delivery routes, leading to the faster and more efficient delivery of goods.

Develop Regional Distribution Centers: Nigeria has a large landmass, and it can be difficult to transport goods from one part of the country to another. Developing regional distribution centres can help to solve this problem. These centres can serve as hubs for goods coming in and out of different regions, making it easier to transport them across the country.

Improve Customs Processes: Nigeria’s customs processes can be lengthy and bureaucratic, leading to delays in the movement of goods. Simplifying and streamlining these processes can help to speed up the delivery of goods and reduce the cost of doing business.

Efforts must also be intensified to improve the nation’s security architecture. Security is important to ensure the safety of individuals involved in this process.

Nigeria’s distribution network needs to be strengthened to support the country’s growing economy. Improving infrastructure, encouraging private investment, embracing technology, developing regional distribution centres, and improving customs processes are important elements to help kick-start this. By taking these steps, Nigeria can build a more efficient and effective distribution network that supports economic growth and development. We can then begin to reap the benefits of the digital economy in tangible ways.

Elvis Eromosele, a Corporate Communication professional and public affairs analyst lives in Lagos.