Half Year 2021: CILT assesses logistics, transport sectors, says many sectors of economy still struggling


The Chartered Institute of Logistics and Transport (CILT), Nigeria has made a review of the performance of the logistics and Transport sectors of the Nigerian economy in the first half of the year 2021 with a position that it has not been rosy for the sectors as many sectors of the economy are still struggling.

Speaking in an interview with our correspondent in Lagos recently, the National Executive Director, CILT Nigeria, Mr. Paul Ndibe noted that if one should view it from the perspective of logistics and transport as a service sector and knowing that the sector was the driver of all economies given globalization and knowing that not much of infrastructural development had been created in the service sector, which according to him, was logistics and transport, it would be certain that the economy may not have progressed.

Ndibe who opined that what drove the Nigerian economy was foreign direct investment was quick to add that they were not coming as a result of insecurity in the land stating that “if there is insecurity, of course, you don’t expect that foreigners will invest.”

According to him, because there was a slack in the volume of direct foreign investment particularly in the service sector and domestically, not much of infrastructural growth had been put in place to help or facilitate the service sector growth, it was therefore imperative that one should not expect much growth in that sector.

He said, “The much that is happening might be small private sector trying to grow, trying to source money, trying to align. These are what can be seen all over the place and that may be having its own contribution but in terms of a dedicated funding for that, no! People may argue that, yes, there is investment in the rail but all we have seen has been injection of funds in trying to grow the facilities for that. The facilities are being laid but the full value of that facilities have not come on stream. They have just launched the Lagos – Ibadan train service but on the passenger level, construction is still going on. It is like a trial run. So, not much value has been drawn from that investment because it is still trying to grow and to develop and draw customers and to develop itself. If you look at the cargo, until December, we will know what shape it will take. Maybe, by that time, the passenger side would have been consolidated.

“If you look at the aviation sector, not much is happening. They all talk about our own national carrier, nothing has happened and because of that, nothing has come on stream. If you look at even the domestic airlines, there are more cancellations and delays in flight schedules now than pre-Covid and many airlines are down because during the Covid, the mandatory inspections of the aircrafts were not conducted and it is a whole sum of money for you to conduct such air checks on planes. So, for airlines that could not raise funds in order to conduct this test and to have the appropriate certificates to fly, they are all grounded. So, that has resulted into shortfalls in the airplanes available for moving people.

“On the international side, some of those flying are placing restrictions; some of them are now not even flying to Nigeria. Arik Air is no longer going on the West Coast on account of non-availability of aircrafts; Air Peace also has its own challenges at one point or the other. So, these are the down part of the aviation sector coupled with the fact that the national carrier talk has not come on stream.”

Speaking on the maritime sector, the National Executive Director observed that the cabotage was still where it was even as he went on to say that the more painful thing with respect to that was that the African Continental Free Trade started on the 1st of January this year and there had not been any appropriate measure in place for Nigeria to commence participation in the African Continental Free Trade Area.

He submitted that in Nigeria, there were still arguments and meetings and developing of the standards for AfCFTA whereas other African countries had commenced trading.

“Now, if you look at also the maritime sector, we have not developed our internal capacity of our waterways for purposes of increasing the volume of trade that we can do within our internal waterways. The much they are doing around the Lagos area with the barges has suddenly collapsed because of the recent accident associated with that and government restriction of areas where the barge operation could take place. So, that is another downside. And of course, on the international shipping, our demands are still growing, congestion is still on the increase and nothing has been done in a more concrete form to mitigate that.

“If you now go to the road transport sector, the chaos is still there. The roads are even getting worse, the vehicles are depleting in terms of their utility and lifespan and everything and the cost of funding new fleet is terrible. The interest rates are high because of high propensity to consume. So, you cannot even borrow and the government mechanisms for influencing growth in the sector have not actually assisted the individual fleet owners. It is the major conglomerates that I will say are taking advantage of all that.

“So, in all sectors, I can say the only breathing sector is the railway but we are yet to see its full value. In the other sectors, they are down, so, in an environment like that, you don’t expect that the contribution of the logistics and transport in the national economy will grow. And if you look at our economic growth, it is also down because we are just coming out from recession and before we can also fund scarcity areas and fund surplus areas in order to have a balance, it will take some time and that time is not yet now. The Central Bank is still struggling; the exchange rate is still deteriorating. With the oil price soaring up, it has not actually reflected because what we were being told about subsidy on petroleum is actually absorbing whatever gains we would have gotten from the oil price increase.

“So, nothing has actually changed and because of that we have not seen any positive increase in terms of economic growth”, he stated.

Photo: National Executive Director, CILT Nigeria, Mr. Paul Ndibe.

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