Stakeholders have warned that the pre-election year would worsen challenges in the supply chain industry and that relief may not come till the end of 2023. They listed the challenges responsible for crippling the supply chain industry in the country to include port congestion, policy inconsistencies, high cost of operations, poor road network and long shipping lead time. Others are the high cost of shipping, absence of raw materials, foreign exchange squeeze and poor technology adoption.
Speaking at the International Lubricants Conference 2022 Nigeria Edition held virtually, the General Manager of Pacegate Limited, Ejeh Godwin, said with the pre-election season, the supply chain difficulties might continue, as politicians would be distracted with political activities.
Godwin, who spoke on ‘Supply Chain Challenges in Nigeria’, said factors affecting the supply chain include changes in documentation and customs procedure at the ports, sudden implementation of the current Economic Community of West African States (ECOWAS) Common External Tariff (CET), frequent hikes of prices due to vessel congestion, container availability challenges and naira devaluation.
He said Nigeria is a tough environment to do business in and also a place of huge opportunity, noting that the nature of policymaking in the country is quite difficult to maintain efficiency. Godwin said a lot of factories have either shut down or downsized due to scarce raw materials, which affected importers to a large extent.
“We have a delay from inspection agents. What usually takes less than four hours now takes about two days with the Customs because of the new regulation where you have to take your documentation from the port to a different location in Ikeja, get the documents treated and then come back again.
“In addition to that, the cost of distribution has gone over 200 to 300 per cent. This time last year we bought diesel at less than N200 but now we buy diesel for over N650. For example, a trucking cost to Kano State used to be N520, 000, but now you need to spend close to N1.5 million to be able to truck the same trailer to Kano State,” he stated.
Also speaking, the Lubricant Marketing Head, Ardova Plc, Habib Bello, said there are several variables affecting the supply chain industry in Nigeria. He said the challenges include, getting a freight forwarder to get the containers for the importer and getting a vessel from the port of origin, which sometimes takes months for it to move as they are trying to make economic loading.
He continued: “When the vessel gets to the port in Nigeria, the port is congested, then you begin to wait for your turn when the terminal operators will offload your container from the vessel. After that, you begin to deal with port authorities, a lot of beaurocracy down the line.”
The General Manager, Sales and Technology, Pacegate Energy and Resources Limited, Franklin Oranisih, said challenges in the logistics chain add additional cost to the raw materials imported and the finished goods.