The continued reliance on manual procurement systems and inefficient logistics is undermining the African Continental Free Trade Area, Kuraway Chief Executive Officer David Chima noted in this interview with JUSTICE OKAMGBA
For years, high transaction costs and lengthy procurement cycles have weighed on Nigerian businesses. What structural issues within the country’s procurement system do you see as the most obstructive?
First, there is no unified, trusted database of vetted vendors. This means each time a purchase needs to be made, individuals or teams have to start searching for, vetting, and negotiating with vendors from scratch. This slows the process, exposes them to potential fraud risks, and creates price instability.
Secondly, many of these processes are still largely manual, leaving room for errors and duplication of effort. There’s also no consistent framework for evaluating vendors or verifying product authenticity. What the country needs is a transparent, standardised, technology-driven system that can quicken the entire process and ensure quality from request to order fulfilment.
The AfCFTA promises freer movement of goods across Africa, but implementation has been slow. What practical barriers do Nigerian SMEs still face when trying to buy or sell across African borders?
Despite the AfCFTA’s aim to harmonise trade, different countries still have their own regulatory requirements, some of which require manual documentation. For SMEs, this means delays and unpredictable clearance times. There is also the problem of poor transportation networks, which make it difficult to move goods efficiently, as well as border-point duty fees or informal charges. So even when demand exists, operational and logistics costs are very high.
Additionally, for Nigerian SMEs looking to buy or sell across African borders, they need to align with product standards, pricing norms and regulatory requirements in these countries. Having to attain these across multiple countries is time-consuming and expensive.
Informality remains a defining feature of Nigeria’s supply chain. How does the lack of reliable supplier data, documentation, and verification affect procurement efficiency and business trust?
The lack of reliable supplier data slows procurement, makes it unpredictable, and leaves it vulnerable to human error or outright fraud. And with no unified, standardised database of vetted vendors, trust becomes harder to build. Procurement teams are left to vet products themselves, potentially exposing them to counterfeit products, unreliable delivery, and hidden costs. We need structured data, transparent documentation, and proper verification to build trust and enable businesses to expand operations.
Foreign exchange volatility has been a major challenge for Nigerian businesses in 2024–2025. How do procurement delays or inefficiencies worsen the impact of FX instability on merchants?
FX instability can eat into a seller’s profit, especially when procurement takes longer than expected. For example, even after a buyer and seller agree on a price, any delay in logistics or product movement exposes the seller to potential rate increases. If the exchange rate rises during that period, the seller ends up covering the difference, reducing or completely wiping out their profit.
As a continent, moving goods between countries also takes a lot of time, time that sellers and buyers simply do not have, especially given the volatile FX situation. This also makes it difficult for merchants to set fixed prices, as they are constantly adjusting to unpredictable exchange-rate swings.
Nigeria’s logistics and transport infrastructure is often cited as a bottleneck. In your experience, how do last-mile delivery constraints, port congestion, or interstate logistics issues influence procurement cycles?
Nigeria’s logistics and transport infrastructure faces numerous challenges, from poor road networks to insecurity. These problems do more than delay the procurement cycle; in extreme cases, they can derail it entirely. For example, when a trader transports a truckload of goods from Kano to Lagos, several disruptions can prevent the truck from ever reaching its destination. At the same time, port congestion creates another layer of risk: goods can sit at the port for weeks, and rising or unpredictable clearance fees can erode profits before the products even enter the market.
When any of these disruptions occur, the manufacturer, the trader, and in some cases even the buyers suffer significant losses.
Digital adoption in Nigeria varies widely across sectors. What cultural or operational factors still discourage businesses, especially traditional MSMEs, from shifting from manual procurement to digital alternatives?
Many Nigerians are hesitant to adopt digital methods, often preferring to run their businesses manually because they associate digital processes with fraud. This is a cultural challenge that extends beyond Nigeria; digital adoption across Africa remains low compared to the rest of the world.
Additionally, many traditional MSMEs struggle with access to reliable digital infrastructure. Without stable internet, affordable smartphones/computers, or a consistent power supply, manual processes often feel safer and more predictable. Digital literacy is another barrier; a trader who isn’t comfortable navigating mobile apps or digital payment systems will naturally default to familiar manual methods.
This situation underscores the responsibility to build tailored solutions for local businesses that align with their ways of operating. But beyond simply building, we also have the task of educating merchants. We need to address their misconceptions and actively build trust by helping them understand how these digital systems work, the level of security they offer and how they can make business operations more efficient. Without this sensitisation, even the best tools will struggle to gain adoption.
Nigeria’s regulatory environment is evolving alongside AfCFTA goals. What policy changes or government-led interventions do you believe are most urgent to reduce procurement friction for Nigerian businesses?
The first priority is compulsory insurance for all businesses, coupled with the issuance of rebates in cases where no losses occur. The new Nigerian Insurance Industry Reform Act 2025 provides a foundation for this. The Act modernises insurance regulation and strengthens consumer protection frameworks. What’s needed now is implementation focused specifically on mandating insurance and streamlining claims processes. Currently, businesses report that even when insured, claims can take months to settle, defeating the purpose.
While many of the challenges affecting procurement cannot be solved overnight, having policies in place to protect merchants can significantly reduce their risks. According to industry data, cargo theft and transportation losses remain significant problems in Nigeria, yet many businesses, especially SMEs, operate without adequate insurance coverage because policies are either unaffordable or unavailable for their specific routes and cargo types.
The government should focus on implementing and enforcing policies specifically related to insurance for goods in transit, ensuring that businesses are protected against delays, losses, or damage during transportation.
As more Nigerian businesses adopt digital procurement processes, what long-term impact do you foresee on job creation, competitiveness, and the country’s ability to participate meaningfully in intra-African trade?
This is straightforward in the sense that if businesses can procure goods and services easily, value addition becomes much more feasible. Streamlined digital procurement reduces delays, lowers costs, and allows businesses to focus on innovation and scaling operations. For example, a manufacturer who currently spends three weeks sourcing materials could redirect that time to product development.
In terms of job creation, easier procurement means more businesses can expand and hire staff across different roles. Competitiveness improves because companies can operate more efficiently, respond faster to market demands, and offer better pricing.
Finally, by adopting digital procurement processes, Nigerian businesses can integrate more seamlessly into intra-African trade, participate in regional supply chains, export goods, and access new markets with fewer barriers. Over time, this strengthens the country’s economic resilience and positions it as a more active player in Africa’s growing trade ecosystem.
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