Nigeria’s reliance on one mode of transport for cargo movement continues to hinder trade efficiency and stifle economic growth. But to unlock its economic potential, the country must adopt a multimodal transport framework, underpinned by actionable policies, ADAKU ONYENUCHEYA reports.
Nigeria’s maritime transport and logistics market is projected to reach $76.8 billion by 2029, with a compound annual growth rate (CAGR) of 0.75 per cent between 2025 and 2029. However, the country’s persistent reliance on mono-modal cargo transportation threatens its ability to achieve this target.
According to data from Statista Market Insights, Nigeria’s container port traffic is expected to hit 1.67 million twenty-foot equivalent units (TEUs) by 2025. Yet, the country’s road-dominated logistics system could severely undermine this growth, which remains economically unsustainable and inefficient.
There are three principal modes of transporting cargo from seaports to final destinations, which include inland waterways (via barges and other vessels), roads (via trucks) and rail (via cargo trains). Unfortunately, Nigeria continues to rely almost exclusively on road transport, neglecting the vast potential of its maritime and rail infrastructure.
Despite possessing expansive maritime, rail and road networks, Nigeria’s overdependence on roads for cargo movement has become a costly oversight.
Nearly 90 per cent of the country’s freight is moved by road, resulting in rapid road degradation, persistent traffic congestion, especially around port environments, and a high incidence of accidents.
A striking example is the Apapa-Oshodi Expressway, which remains gridlocked with trucks. This congestion leads to billions of naira in demurrage charges, lost man-hours, damage to goods, inflated transport costs, and increased operational risks—particularly around vital corridors like the Apapa and Tin Can Island ports.
These inefficiencies have placed a significant financial burden on Nigeria’s business community. Industry stakeholders argue that the government’s failure to develop and fully utilise the country’s rail and inland waterway infrastructure has stifled the logistics sector’s growth and competitiveness.
The Country Representative for Port of Antwerp-Bruges International, Taiwo Olajide, stressed the importance of multimodal transportation in revitalising Nigeria’s shipping and logistics industry.
Speaking at a recent industry forum, Olajide described multimodal transport as the heartbeat of efficient shipping, noting that seamless port operations are crucial for achieving fluidity across the logistics value chain.
Neglecting rails and waterways
Several policy and structural issues continue to hamper the development of Nigeria’s inland waterways and rail cargo services, threatening the growth of a sustainable multimodal transport system.
Nigeria’s railway system, once vibrant, now suffers from outdated rolling stock, limited connectivity and a rigid, centralised regulatory framework. Until the 2023 constitutional amendment, the 1999 Constitution vested exclusive control of railway infrastructure in the Federal Government, effectively locking out state and private sector participation.
This centralisation stifled innovation and limited subnational investments in state-based cargo rail corridors. Although the recent amendment permits states to build and operate their railways—opening the sector to competition and private capital—progress remains slow.
The Nigerian Railway Corporation (NRC), a federal monopoly, retains control over operations and infrastructure. Its bureaucratic structure, lack of financial autonomy, and outdated procurement processes have discouraged private investment and hindered modernisation efforts.
Moreover, Nigeria lacks a functional intermodal integration policy that connects rail infrastructure directly to key ports and industrial zones. Although inland dry ports exist in Kaduna and Kano, they remain underutilised due to weak rail linkages with seaports in Lagos and Port Harcourt. For instance, the Kaduna Dry Port, commissioned in 2018, continues to operate far below capacity owing to erratic rail schedules and inadequate connectivity to Lagos ports.
The situation is worse in the South-East and South-South regions, where the rail infrastructure for cargo movement has remained largely neglected since the end of the Nigerian Civil War in 1970.
According to data from the Nigerian Shippers Council (NSC), less than 10 per cent of cargo arriving at Nigerian ports is currently evacuated by rail. The Chairman of the Association of Registered Freight Forwarders (AREFF), Onne Port Chapter, Ugochukwu Obinna, decried the state of the railway system in the East, describing it as comatose. He questioned the credibility of regulatory agencies advocating for seamless cargo movement without acknowledging the true state of infrastructure.
“They don’t even know how the system operates.. We are left to suffer despite the huge economic resources from the East that sustain the Federal Government. This is a mockery of our leaders and intelligence. The NSC should know that the rail system in the East is not functional. Before talking about seamless movement of cargo, they should first address the infrastructural decay by going to the National Assembly,” Obinna said. “
Obinna also recalled how former Minister of Transportation, Mr. Chibuike Amaechi, failed to secure a standard-gauge railway project for the East under President Muhammadu Buhari’s administration.
Waterways potential ignored
Nigeria’s inland waterways, governed by the National Inland Waterways Authority (NIWA) under the supervision of the Federal Ministry of Marine and Blue Economy, remain underutilised, plagued by an unclear legislative framework, poor infrastructure and policy inertia.
NIWA is frequently locked in jurisdictional disputes with coastal states like Lagos and Rivers over regulatory control and licensing. This has discouraged private sector participation, creating uncertainty and stalling investments.
Stakeholders also point to a lack of coordination between port terminals and rail yards, forcing containers onto roads due to broken intermodal linkages.
Dredging projects, such as the Lower River Niger Dredging Initiative, which aim to allow year-round cargo navigation from Onitsha to the Niger Delta, have been left underfunded and largely abandoned.
Similarly, the Inland Dry Ports Policy, meant to decentralise cargo movement and reduce congestion at major ports, has failed to deliver results due to poor road and rail connectivity, weak policy implementation and insufficient incentives for logistics firms.
Maritime security remains another concern. Inland waterways suffer from poor enforcement of maritime security measures, particularly the C4i Secure Anchorage Project, leaving vessels vulnerable to piracy and theft, especially in areas like Bayelsa and Rivers States.
Barge operators, once seen as a viable alternative to trucks, now face declining operations due to regulatory bottlenecks, financial constraints and poor terminal support.
President of the Barge Operators Association of Nigeria (BOAN), Bunmi Olumekun, lamented the deteriorating state of barge operations, particularly at APM Terminals in Apapa, which currently lacks berthing space for barges. He also noted that indigenous operators are being sidelined at the Lekki Deep Seaport due to the type of barges they use.
“Lekki Port demands sea-going barges, but most local operators rely on conventional barges and tugboats. A self-propelled barge costs between N4 billion and N5 billion, far beyond the reach of most indigenous operators,” he said.
He further revealed that many barge operators are selling off their assets or relocating to areas like Port Harcourt with better prospects. The lack of timely loading windows and berthing support has left barges idle for weeks, causing significant financial losses.
Olumekun stressed that with the right investment, Nigeria could become a transhipment hub in West Africa, enabling barge-based cargo movement to neighbour countries such as Benin Republic, Ghana, Côte d’Ivoire and Liberia.
However, that potential remains largely untapped without funding, infrastructure upgrades, and supportive policies.
Cost of mono-modal transport
The economic toll of Nigeria’s inefficient, road-dependent transport and logistics system is staggering. The country’s logistics network continues to underperform despite possessing over 3,000 kilometres of railway lines and a vast coastline housing major ports such as Apapa, Tin Can, Port Harcourt, and Calabar.
This persistent inefficiency hampers trade, disrupts supply chains, particularly for agriculture—and limits economic growth. According to data from the National Bureau of Statistics (NBS), the transport and logistics sector’s contribution to Nigeria’s GDP declined to 1.10 per cent in Q4 2024, down from 1.61 per cent in the same quarter of 2023.
This decline is largely attributed to poor road infrastructure and the near-absence of a functioning rail system for cargo transportation. The African Development Bank (AfDB) estimates that Nigeria loses over $10 billion yearly due to logistics inefficiencies. Similarly, the World Bank puts the figure at approximately four per cent of the country’s GDP, lost due to fragmented, unreliable, and costly transport systems.
Lessons from other climes
Nigeria can draw valuable lessons from both African peers and global economies that have successfully adopted multimodal transport systems to spur development.
In East Africa, Kenya’s Standard Gauge Railway (SGR) linking the port of Mombasa to Nairobi has significantly reduced cargo movement costs and transit time from the port to the hinterland.
This has eased port congestion, improved logistics efficiency, and reduced freight charges for importers and exporters. South Africa offers another compelling example, where cargo transport efficiently combines road, rail, and port infrastructure.
The state-owned logistics company, Transnet, moves over 200 million tonnes of freight annually via rail, underpinning the country’s mining and agricultural exports.
Globally, Germany’s Rhine River serves as a key logistics artery, seamlessly integrating barge traffic with road and rail systems to create a fluid and highly efficient supply chain.
China’s Belt and Road Initiative (BRI) is another standout example, demonstrating how synchronised rail and maritime corridors can drive trade growth and economic development across multiple continents.
For Nigeria to succeed as a regional trade hub, it must commit to building a truly multimodal transport system. The integration of rail, road, and inland waterway solutions is no longer optional—it is an economic necessity.
Industry experts and stakeholders have consistently advocated for the full liberalisation of the rail and inland waterways sectors to encourage private sector participation.
They also recommend the establishment of a National Intermodal Logistics Master Plan to guide infrastructure integration and support digital transformation across cargo tracking and port clearance procedures—critical steps toward reducing delays and increasing efficiency.
Key priorities highlighted include increased budgetary allocations, strengthened public-private partnerships for inland port and rail infrastructure development, and legal clarity between NIWA and state governments to foster investor confidence in the waterways sector.
The Country Representative of Port of Antwerp-Bruges International, reiterated the port’s commitment to supporting Nigeria’s economic development and energy transition goals through logistics reforms.
“Our value proposition for the country is grounded in international best practices in port management and operations. We’re leveraging global experience to help Nigeria develop a more efficient and sustainable logistics ecosystem,” Olajide said.
He spotlighted a flagship initiative—the Afro-Burge Port Community—which aims to consolidate cargo handling through improved barge operations and technology-driven logistics.
“We have a structured programme that clusters cargo for consolidation and efficient barge transport. Around 40 per cent of our cargo is now handled by barges, essentially floating trucks, which has significantly boosted operational efficiency,” Olajide explained. He added that investments are ongoing to develop inland waterways infrastructure and reduce dependence on road transport.
“Inland waterways connectivity is a common challenge in many African port systems. But we’re committed to a model that ensures seamless flow between ports and hinterlands,” he added.
Olajide further revealed that two major maritime development projects, spearheaded by the European Union (EU), are set to commence in Nigeria. These initiatives are expected to significantly strengthen the country’s shipping capacity and inland waterway navigation.
While clarifying that the Port of Antwerp-Bruges is not the direct owner of the EU shipping corridor project, Olajide noted that it serves as a key technical partner.
“This initiative will enhance the shipping business, improve vessel traffic, and open up new maritime trade corridors between Africa and the rest of the world. It’s a transformative project with massive potential,” he said.
A delegation from the EU is expected in Nigeria soon to prepare and formalise the next steps. The second major project focuses on revitalising Nigeria’s inland waterway navigation—a critical but underutilised segment of the nation’s logistics network.
He said the initiative involves multi-agency collaboration with institutions such as Afreximbank, the Nigerian Shippers’ Council, NIWA, and the Nigerian Ports Authority (NPA).
“These initiatives are not just about improving logistics. They are about unlocking economic growth,” Olajide concluded.
