Trust Deficit Threatens Nigeria's $15 Billion Logistics Industry Boom
Nigeria's rapidly expanding delivery and logistics sector, which is forecast to grow to $15.05 billion by 2030, is confronting a severe challenge that infrastructure improvements and financial investments alone cannot resolve. As millions of e-commerce transactions increasingly depend on dispatch riders and last-mile operators to transport goods across urban centers, a rising tide of theft, item diversion, and service manipulation is steadily undermining consumer trust in the system.
The Foundation of Nigeria's Economy
Nigeria operates as a maritime-driven import economy, with over 95 percent of imports arriving through seaports, while distribution relies heavily on road transport, accounting for more than 80 percent of goods movement. This underscores the critical role logistics plays in the nation's overall productivity. According to the World Bank's 2023–2024 Logistics Performance Index, Nigeria ranks 88th globally, highlighting an urgent need for stronger policies and enhanced infrastructure to support growth.
Findings indicate that no fewer than 120 million e-commerce orders are placed annually in Nigeria, reflecting a high volume of transactions and a heavy reliance on courier and logistics services, particularly for last-mile delivery within cities. However, small-scale logistics operators are struggling due to a trust deficit caused by a minority of dishonest actors, potentially jeopardizing the projected $15.05 billion growth by 2030.
Real-World Consequences of Trust Issues
Experts warn that a single negative experience can significantly damage customer loyalty, pushing consumers back to traditional services such as in-store shopping or personal errands, which could stall the expansion of the on-demand service economy. A recent incident involving Chinedu, a Lagos rental studio owner, vividly illustrates this problem. Chinedu sent a professional Sony FX3 camera worth approximately N5 million to a client using a dispatch rider, but the rider never reached the destination. Instead, the rider allegedly diverted the delivery, disabled the tracking app, and turned off his phone.
Chinedu recounted, "The client was left stranded, and I had to find another camera for the client." After 24 hours, he initiated a search using app data and social media posts, eventually tracing the rider to a restaurant in Ilupeju, Lagos, with the help of an investigative police team. During questioning, the rider confessed to selling the camera, lens, and microphone to different buyers in Ikeja for just N500,000, unaware of their true value. This led to an eight-day recovery process involving tracking and arrests across multiple states, including Abeokuta in Ogun State and Ibadan in Oyo State, before Chinedu retrieved his equipment.
Similarly, on social media platform X, user @y4yi described a situation where a rider substituted snacks ordered from one restaurant with cheaper alternatives from another to pocket the price difference. These experiences reflect the daily challenges faced by many Nigerians who rely on e-commerce platforms and must engage with logistics operators.
Industry Growth and Structural Challenges
The logistics sub-sector was valued at $10.95 billion in 2025 and is projected to grow to $15.05 billion by 2030, according to Mordor Intelligence, a global market research and consultancy firm. This growth projection is based on factors such as e-commerce expansion, port modernisation, trade infrastructure improvements, logistics digitisation, and third-party logistics development. On average, delivery service costs range from N2,500 to N10,000, depending on location and item type.
Statistics show at least 2,000 identified bikes are used for logistics business on Nigerian roads, with major players like Glovo, Chowdeck, and DHL employing a significant portion of the sector's workforce. In fact, these three companies account for about 70 percent of employees in the industry. Chowdeck, a leader in on-demand delivery, saw a 1,200 percent revenue increase between 2022 and 2023, surpassing N30 billion in Gross Merchandise Value by 2024 and securing $9 million in funding by August 2025. Glovo reported a 76 percent surge in quick commerce in Nigeria for 2024, generating over N71 billion in revenue between 2021 and 2024. DHL Group, a global giant, reported revenues of €84.2 billion in 2024, indicating market normalisation.
GIGM.com (God is Good Motors) continues to dominate land transport and cargo through digitisation but faces challenges such as rising fuel prices following petrol subsidy removal. Despite moving goods worth billions of Naira annually, the success of these companies hinges on the integrity of thousands of drivers and riders. Many logistics firms lack Goods in Transit Insurance, leaving them vulnerable in incidents involving goods under their care.
Expert Recommendations for Improvement
Ofili Anochie, a rider and owner of Jack & P Logistics, advised companies to plan routes carefully and implement measures for personnel employment. He emphasised delivering orders promptly to avoid delays and advocated for training, orientation, and background checks for delivery personnel to maintain trustworthiness and support Nigeria's GDP growth while providing employment for youth. Anochie stated, "When we bring in new drivers, we train them to represent the company well. If we don't, they will just do things their own way. As an owner, I try to motivate my drivers and offer bonuses. This makes them want to work hard." He noted that many riders have personal customers and may prioritise their own business over company work, leading to time wastage and order diversion.
Anochie stressed the importance of tracking riders before and after employment, linking bad behaviour to a lack of proper documentation and accountability. He insisted that every driver should have a regularly updated profile. Olamilekan Wealth, a Chowdeck rider, highlighted the survival pressures faced by riders, explaining that low pay barely covers fuel, maintenance, data, and living expenses. He said, "For many riders, the pay barely covers fuel, maintenance, data and living. When working longer hours with no progress, survival pressure leads to temptation. Some of the riders use other means to get what they want." Wealth also pointed out challenges like unpredictable traffic, bad roads, potholes, floods, and climate-related hazards such as heavy rain and extreme heat, which affect safety and delivery times.
While most delivery companies have disciplinary measures for riders who deliver wrong items, Wealth insisted that some circumstances are beyond riders' control. Addressing these trust issues is crucial for Nigeria's logistics industry to achieve its full potential and sustain growth in the coming years.
