The recent flooding in Nigeria has significantly impacted the country’s supply chains, particularly in the agricultural and transportation sectors. In this article, we review the impact of flooding on Nigeria’s Supply Chains.
Through September 2022, communities and cities across Nigeria have been flooded. This has resulted in many citizens losing their homes and businesses. A recent report on the flood estimates about 600 deaths in these communities.
The flooding has been devastating and probably an indictment of government priorities. However, the lives lost are not the only impact the flood has had. The economy is fragile as businesses are affected, especially in the petroleum and food sectors.
Nigeria’s Supply Chains Impacted by the recent flooding
Agricultural supply chains
Nigeria’s agricultural sector is a significant contributor to the country’s economy, accounting for about 22% of its GDP. The recent flooding has caused massive damage to farmlands, crops, and livestock.
According to the Nigeria Hydrological Services Agency (NIHSA), 14 states are at high risk of flooding, which has affected the production and supply of food items such as rice, maize, sorghum, and vegetables. As a result, food prices have increased, and the affected regions have concerns about food security.
Transportation supply chains
Transportation is a critical component of Nigeria’s supply chain. The country relies heavily on road transport to move goods and services.
The flooding has damaged several roads and bridges. Thmaking it difficult for trucks to transport goods to various parts of the country. The disruption in transportation has led to delays in the delivery of goods, increased transportation costs, and a shortage of goods in some areas.
Manufacturing supply chains
The manufacturing sector in Nigeria has also been affected by the recent flooding, with some factories shutting down due to flooding and power outages. The disruption in manufacturing has led to a shortage of goods. And this has contributed to the increase in prices of consumer goods.
Supply chain resilience
The recent flooding has highlighted the need for Nigerian businesses to improve their supply chain resilience. Businesses need to have contingency plans in place to respond to unexpected events such as floods.
This could include diversifying their supplier base, building redundancy into their supply chains, and implementing a digital supply chain management system to monitor their supply chains in real-time.
Impact of the Flood on Nigeria’s Supply Chains and Businesses
Supply chain activities in these industries are very little or non-existent, with businesses finding it difficult to produce, buy, and sell their commodities due to severe disruptions caused by damage to public infrastructure.
Trucks carrying these commodities are stuck in key regions such as Lokoja, Bayelsa, and most of the North central region.
These disruptions have had different effects on different states. While it has made goods cheaper in some, it has made them quite expensive in others. Some of the results are:
Unbalanced supply and demand
Commodities such as petroleum products, food items, and other fast-moving goods are becoming scarce and very expensive in parts of the country affected by the flood. For example, hundreds of trucks are stuck in Lokoja, with some truck drivers claiming to have been there for more than two weeks due to the flood.
Most businesses in the unaffected areas are forced to sell their goods and commodities cheaply to avoid huge losses from damages. In Abuja, the nation’s capital and other parts of Northern Nigeria, food items are cheaper than they have been in years because traders are flooding the market with their commodities.
Travel disruptions
Transportation and travels are other sectors affected. Over 90% of Nigerian citizens travel by road. Even if they wanted to travel by air, the airlines are too expensive and cannot cater to the thousands of people on the road daily.
Many of these people travel between the North and East regions. The two regions are heavily affected by the flood. While people are stranded, transport companies also lose revenue and resources because of their inability to provide services. The economic impact could have untold consequences.
Loss of revenue
Organizations and supply chains are losing revenues because of the downtime in their supply chains. As mentioned earlier, most businesses are forced to sell their commodities at much lower rates to prevent damages such as rotten foods.
Some businesses have their commodities stuck on the road while providing security charges, the cost of holding goods, and possible theft. Some have lost their goods entirely. These businesses are unsure how to recoup these lost resources when the floods subside.
How Nigeria’s Supply Chains and Businesses Can Respond
Businesses and their supply chains are impacted heavily at the moment. However, it doesn’t have to be the end for these supply chains. Here are a few suggestions:
Finding alternative road routes
Businesses should seek alternative road networks or routes to get their goods or commodities to other parts of the country where they are needed. It may result in longer routes and more fuel costs, but it is a better alternative than doing nothing.
Businesses that seize this opportunity on time can sell at a higher cost to recoup their expenses or losses.
Find alternative suppliers
One of the many reasons supply chains are stranded is the difficulty involved in getting the raw materials they need to produce their commodities. Supply chains can seek local or international suppliers to get around the situation. These suppliers can provide them with the same materials or alternative materials they need to continue production.
For example, strawberry extracts are the primary ingredients in making strawberry drinks. These drinks are manufactured primarily in the southern region, but the extracts are obtained from the North.
Manufacturing businesses in this industry can import these extracts pending when the flood situation is resolved. In the future, they would also do well to partner with more suppliers to prevent these sorts of downtimes.
Partner with the government
While the government is doing its best to help control and end the flooding, businesses can partner with the government to provide innovative ideas and speed up the process.
Doing this would benefit businesses and organizations by getting their operations back up. They would also gain the goodwill of the people they help, which doubles as good PR for them.
Conclusion
The recent flooding has significantly impacted Nigeria’s supply chains, particularly in the agricultural and transportation sectors.
Businesses must take proactive steps to improve their supply chain resilience and mitigate the impact of unexpected events on their operations.
Obinabo Tochukwu Tabansi is a supply chain mastro and writer with a decade of experience working in different facets of the supply chain. Today he is living his passion for writing on all things supply chain. His blog, Supply Chain Nuggets, is Africa’s fastest-rising supply chain blog, helping professionals, business owners, and curious minds navigate the supply chain complexities on the continent.
