By Francis Omotosho
In the recent Logistic Performance Index by World Bank, Nigeria was ranked 95th Position as other African countries like South Africa, Egypt, Benin Republic and others beat Nigeria in the ranking.
The word logistic means reduction in total cost in addition to quality service delivery to customers.
In simple words, it is all about delivery of quality services or goods at the most economic cost to customers.
This is exactly what the consumers want for him to be satisfied. He wants a cheaper price with good quality; that is logistics.
However, the three costs components of any country’s National Supply Chain Logistics System includes: Seaside Logistics (Sea Freight Transport Cost); Landside Logistics (Hinterland Transport Logistics Cost); and the part that connects between the two; that is Port Operations Service Logistics (Cargo Clearance Logistics Cost).
The major challenge shippers (Importers and Exporters) have in Nigeria is the logistics system costs expenses in their delivery supply chain.
Shippers can easily negotiate their invoice cost with their buyers or sellers but cannot determine the total logistics expenses to incur at all our international trade entry points (Seaport, Airports and Land Border Posts).
As a matter of fact, Nigeria National Logistics Component Costing is the highest in the whole of Africa. No doubt the whole economic meltdown and ongoing protest in Nigeria is as a result of the high cost of logistics expenses and high customs duty by way of the high customs revenue target set by the Federal Government.
Of course, the consequences are what we are seeing now. I therefore urge the government to seriously look into this as the only way out to solve the lingering high poverty and hunger in Nigeria. You could see now that the government had removed import duty on some food items. But I expect government to also reduce port dues and charges as well as remove some levies, fees and taxes by some government agencies who are not revenue generating agencies but impose high costs of regulation and control on major Fast Moving Consumer Goods (FMCG) such as NAFDAC, SON, NAQS, NESREA etc.
If you check out their registration fees and some of their levies for registration and permits, you will understand what it means on every import and export supply chain costing; coupled with demurrage, caused by deliberate delay tactics of the terminal operators and our over dependant on imported goods which brought about imbalance in our trade system, consequently results in high cost of dollar exchange rate.
The time to reduce cost is now. Many manufacturers are closing down and moving out of Nigeria because of our High National Logistics Systems.
Fwdr. Francis Idowu Omotosho is a Senior Forwarder of Nigeria. He is a Transport & Logistics Supply Chain Expert.
Photo: Mr. Francis Omotosho, Transport and Logistics Supply Chain expert.
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