‘Innovations in logistics tech will see Nigeria benefit from AFCFTA’ 

Sehinde Afolayan is an innovator and believer in the future of the African logistics industry. He is the Chief Executive Officer and Co-founder of Haul247, a tech-enabled logistics and haulage company in Nigeria. In this interview with  ADEYEMI ADEPETUN, he spoke on the potential of the industry, how Nigeria can benefit from AfCFTA, among other germane industry issues.

Nigeria is big with huge logistics potential. What is the value of this industry?
The Nigerian logistics business has grown slowly due to persistent infrastructure difficulties that have been aggravated in recent years. Despite this, the industry’s value is estimated to be around $60 billion, with e-commerce being a key driver. For context, the Nigerian E-Commerce market generated $4.8 billion in revenue in 2019. Its revenue is estimated to expand at a CAGR of 20.5 per cent between 2019 and 2023, resulting in a market volume of approximately $10.2 billion by 2023.
 

How will you describe the Nigerian logistics industry, given the peculiarities of our business climate?
Nigeria’s logistics business is still in its infancy. However, due to recent infrastructure improvements in railways and roads, as well as enhanced relations with other nations, it is expected to become one of the country’s fastest-growing industries.
  
According to the National Bureau of Statistics, the Nigerian Transportation and Storage sector rose by 29.72 per cent in Q4 2021. This rate indicates a 35.67 per cent point rise over the same quarter the previous year and a 9.12 per cent point increase over the prior quarter. This shows enormous potential that can be unlocked with the right investments in infrastructure and policy.
  
One key trend is that trade across Africa is getting more connected, especially with the launch of AFCTA and the Pan Africa Payment Settlement System (PAPSS). Therefore logistics tech companies like Haul247 are looking at taking advantage of the growing market and becoming part of the connectors to all these markets/cities by facilitating trade.

What are some of the key challenges confronting logistics business in Nigeria in your view?
The industry is plagued with many challenges that are not peculiar to Nigeria but are the case as you travel across Africa. As a logistics company in Nigeria, we deal with these issues daily. As I mentioned earlier, infrastructural gaps constitute a significant issue. Technology adoption and over-concentration of manufacturing sites are also issues. 
 
We operate in an essential industry; you need to move food and other essential goods across the country, so there will always be demand for our services irrespective of problems. If these concerns are handled promptly, Nigeria will experience unprecedented rapid growth.

What are the areas of competence of Haul247?
Haul247 is a one-of-its-kind logistics platform created to solve challenges in the African logistics industry using technology to simplify processes. Our cloud-based online logistics platform, accessible via web and mobile apps, offers a modern and simplified approach to trucking, warehousing, and tracking shipments.
  
We have designed our platform to increase efficiency for our customers and help them save money and time. Our system matches orders with available assets with our “Airbnb” approach for trucks and warehouses. Ultimately, our goal is to increase the efficiency of the logistics industry by over 70% through our services.
 
With over a decade of expertise in the supply chain sector, I have always believed that any logistics solution that does not connect trucking with warehousing is risky and may likely fail in the long term, which is why I founded Haul247 with my partners, Tobi Obasa and Akindele Phillips.

How exactly have infrastructural challenges impacted logistics business?
Road transportation accounts for roughly 90 per cent of Nigerian mobility; however, we are plagued by bad roads, insecurity and other issues as vehicles transport goods across the country. Infrastructure significantly impacts any company moving goods and persons in Nigeria, and Haul247 is no different.

According to data from our partners, some of the highest costs they incur in truck maintenance are related to the poor condition of Nigerian roads. Aside from that, other modes of transportation have not been fully developed, limiting the potential to move products and people more quickly, safely, and efficiently.

How are operators able to navigate this tough terrain?
With the current state of the Nigerian logistics industry, it has become critical for logistics companies to leverage technology. I believe those who understand how to leverage a wide range of new technologies, from data analytics to automation and platform solutions, will emerge as winners.
 

What role does technology play in the logistics business?
Technology is essential in the logistics industry and, in particular, in the sector’s future. Globally, logistics companies are starting to use machine learning and artificial intelligence to automate the supply chain and uncover insights that would otherwise be lost in the data avalanche.
 
Self-driving cars have already become a reality, and self-driving trucks are not far behind. Eventually, nearly all supply chain processes will be automated. Overall, technology makes the logistics business much easier than it was previously. Nigeria and Africa at large must begin to step up by taking advantage of technology going forward.

What solutions like ours at Haul247 bring to the ecosystem is improved efficiency. The logistics business is such that most manufacturing companies concentrate or have their manufacturing hubs in only one city and, from there, move or distribute their products to over one thousand cities and towns across the country.
 
Truck owners usually charge manufacturers and shippers excessively since they have to absorb the empty return leg. With our Airbnb approach for trucks and warehouses, the Haul247 system matches orders with available assets. Partners are assured of reverse hauling, and shippers are charged less than they usually pay; this reduces transportation costs and guarantees efficient asset utilisation making it a win-win situation for logistics providers and users.

From the logistics perspective, how can Nigeria leverage the opportunities of AfCFTA to improve the economy?
The possibilities for the Nigerian economy are enormous. But before I get into that, I’d like to discuss the broader opportunity for the continent. The African Continental Free Trade Area (AfCFTA) agreement is expected to create the largest free trade area in the world. The pact will connect 1.3 billion people across 55 countries with a combined GDP valued at $3.4 trillion. It has the potential to raise 30 million people out of severe poverty.
  

Going by some of these challenges and opportunities itemised above, what is the future?
As I have mentioned, the future of the Nigerian logistics industry lies in the increased adoption of technology, improved infrastructure and progressive policymaking. Incorporating these elements into the Nigerian logistics industry will bring about increased efficiency, improved mobility across cities, better storage and embedded financing for the agricultural sector and increased transparency in African trade.
 
Without these, the industry’s potential will not be fully unlocked, limiting opportunities to create jobs, diversify the economy, and improve food sufficiency. We will also lose the opportunity to harness data that could be beneficial for informed policy decisions that will spur economic growth.

Given the high competition in the industry, what sets Haul247 apart?
Undoubtedly, the industry has become more competitive as the number of logistics start-ups in Nigeria has increased. However, Haul247 stands out due to our one-of-a-kind system. Haul247’s value proposition is simple- a unique platform offering opportunities for clients to transport and store their goods in one logistics ecosystem.
 

Has the FG’s Ease of Doing Business impacted your business, and how can the government improve its support for logistics businesses in Nigeria?
I believe Nigeria’s Ease of Doing Business policy is one of the most significant and robust we’ve seen in recent years. The ongoing reduction of bottlenecks and bureaucratic restraints that have impeded the growth of businesses has brought a new lease of life to the private sector. It has also given investors more confidence in the Nigerian economy.
 
For us in the Nigerian logistics industry, more government investments in transportation infrastructure such as public roads, ports, and airports are essential. I also believe that enhancing economic regulations and policies will significantly alleviate the issues faced by stakeholders in the Nigerian logistics business.