Aug 05, 2020 (Market Insight Reports) -- Nigeria Third-Party Logistics (3PL) Market, projects a standardized and in-depth study on the ongoing state of Market, providing basic industry insights such as definitions, classifications, supply chain, applications and industry cost structure. The report precisely delivers productive information about development policies and plans as well as manufacturing processes and techniques.
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The Nigerian Third-Party Logistics (3PL) market is expected to register a growth rate of over 8% during the forecast period of 2020-2025.
Report includes top leading companies DHL, FedEx, UPS, GMT Logistics and Maersk
Among recent developments, UAE-based retailer Lulu Group annoucned plans to set up a sourcing and logistics facility in Nigeria to export local agricultural produce across the GCC, India and the Far East.
Key Market Trends
AfCFTA to Increase Intra Regional Trade
The intra-Africa trade currently is limited to 15% of Africa's total trade, indicating a very weak intra-regional value chain as compared to Asia, where it is at 80%. With the introduction of the African Continental Free Trade Agreement (AfCFTA), which is the world’s largest free trade zone signed by 54 countries and is expected to revolutionize trade across the continent, the trade volume and hence the economy of the continent is expected to grow significantly. The act will focus on increasing the production capabilities in an exceedingly competitive global landscape.
With the agreement implemented, the manufacturing and production of essentials and value-added products will increase improving the economic diversification and accelerating structural transformation, increasing the investments and decreasing the dependence on labour forces; shaping the competitiveness of African economy by productivity gains. With the increase in in-house production in South Africa, global exports are also expected to increase.
Although Nigeria signed the agreement in July 2019, in October, it slapped a ban on the movement of all goods from countries like Benin, Niger and Cameroon, banning all trade import and export with its neighbouring countries to curb the smuggling of goods like rice, tomatoes and poultry and strengthen Nigeria's agricultural sector. The ban was removed in December with the strong determination of not allowing any smuggling and other destructive trade practices to continue unchecked in the country, undermining the nation's development efforts.
Boost in manufacturing output and exports to increase the demand for 3PL services
The project Make in Nigeria for Export (MINE) is a presidential initiative, to develop the world-class Special Economic Zones (SEZs) across Nigeria and boost the manufacturing of Made in Nigeria goods for export, regionally and globally. The project aims to increase the manufacturing sectors contribution to GDP to about 20%, create 1.5 million new direct jobs and generate over USD 30 billion yearly by the year 2025. The Federal Executive Council (FEC), Economic Management Team (EMT) and Project MINEs Steering Committee of the country will be working under the sustainable Public-Private Partnership (PPP) model to develop SEZs across Nigeria.
The first round of funding will quintessence on developing Funtua Cotton Cluster, Enyimba Economic City and Lekki-Epe Model Industrial Park in Katsina, Abia and Lagos State respectively increasing the domestic demand as well as exports in the market giving a boost to the logistics and warehousing sector.
Big companies are acquiring and partnering with the companies in Nigeria looking at the growth scope in the country. For instance, Coca-Cola acquired a 40% stake in the Nigeria based beverage company, Chi Limited intending to evolve as a total beverage company with the help of Chis diverse range of portfolio.
With the trade agreement in place, the scope of the development of the manufacturing space in Nigeria is huge.
Nigerian freight logistics startup Kobo360 raised USD 20 million Series A round led by Goldman Sachs and USD 10 million in working capital financing from Nigerian commercial banks. The company connects truckers and companies to delivery services will use the funds to upgrade its platform and expand to 10 new countries beyond current operating markets of Nigeria, Togo, Ghana and Kenya.
Maersk Shipping Line has concluded plans to provide logistics and supply chain management support for FMCG companies in Nigeria. The Sealink is envisioned to bridge the regional maritime logistics infrastructure gap and to also moderate the transport logistics in intra-African trade.