The business case for green logistics in Nigeria

In the heart of Kigali, Rwanda, a mid-sized logistics firm known as AC Group made headlines last year when it converted its entire fleet of delivery vehicles to electric motorcycles. Operating within Kigali’s urban logistics grid, the company reported a 40% drop in fuel costs and a 20% increase in operational efficiency within the first 12 months. More importantly, they became a model for sustainable business, gaining not just profit but purpose, and attracting international impact investors in the process.

Compare this with the situation in Lagos, Nigeria – Africa’s most populous city – where delivery trucks often spend up to 8 hours in gridlock, burning diesel and belching black smoke into the already polluted air. Despite having the largest economy on the continent, Nigeria’s logistics and haulage industry has been slow to embrace the green revolution sweeping through other emerging markets.But the winds are shifting.
As global climate policies tighten and sustainability becomes a business imperative, Nigerian logistics operators must begin to see the transition to green logistics not as a cost centre, but as a competitive advantage. This article presents the business case for that shift – and why now is the time for action.

What is green logistics?
Green logistics refers to efforts made to reduce the environmental impact of logistics operations through the use of clean energy, fuel-efficient vehicles, route optimization, and sustainable packaging. It encompasses the full spectrum of the supply chain – from warehousing to transportation – focused on cutting greenhouse gas emissions, waste, and energy consumption. For Nigeria, green logistics is more than a climate necessity; it is an economic opportunity.

Nigeria’s climate crisis: The transportation factor
According to Nigeria’s 2021 Nationally Determined Contribution (NDC) report, the transportation sector accounts for roughly 23% of total greenhouse gas emissions – largely from road transport, which dominates the movement of goods and people.

With over 11 million vehicles on Nigerian roads (90% of which run on fossil fuels), the cost to the environment and public health is staggering. Lagos alone loses ₦1.8 trillion annually to productivity losses and health impacts related to air pollution, according to the World Bank. Haulage and logistics companies, with their reliance on diesel trucks, are key contributors to this problem. But therein also lies the solution.

The business incentive: Cost savings and new markets
Transitioning to green logistics offers immediate and long-term benefits for Nigerian logistics companies.
1. Fuel cost savings
Diesel prices in Nigeria have more than doubled in the past 18 months following the removal of fuel subsidies. For logistics firms, fuel now constitutes 35-50% of operational costs. Switching to dual-fuel systems (diesel-CNG) or electric vehicles (EVs) can reduce fuel costs by up to 50%, according to pilot programmes conducted by companies like Medessy Energies.
2. Market differentiation
Brands are increasingly demanding sustainability from their logistics partners. Multinationals like Unilever, Nestlé, and Coca-Cola now require third-party logistics (3PL) providers to report carbon emissions and adopt emission-reducing practices. Being a green logistics provider is no longer a luxury – it is a requirement to play in the big league.
3. Access to impact funding
Green logistics unlocks access to concessional loans and climate financing from development finance institutions. The African Development Bank (AfDB), for instance, is funding over $400 million in sustainable transport projects under its Climate Change Action Plan. Local logistics firms with credible transition plans can tap into these funds.
4. Regulatory advantage
As Nigeria’s Energy Transition Plan (ETP) kicks into gear, companies with a head start on emission reduction will be better positioned to benefit from government incentives such as tax rebates, carbon credits, and fleet modernization grants.
Rwanda vs. Nigeria: A green policy gap
Rwanda’s progress in green logistics stems from intentional policy. The government offers VAT waivers and import duty exemptions on electric vehicles and spare parts. In addition, it is building a public EV charging infrastructure to encourage adoption.

Nigeria, by contrast, lacks a coherent policy framework on green transport. The proposed National Automotive Industry Development Plan (NAIDP) includes provisions for EV adoption but lacks clear implementation guidelines or incentive schemes for logistics firms.
For real progress, Nigeria must emulate models like Rwanda’s and tailor them to its scale and complexity.

What Nigerian haulage firms can do
1. Conduct emissions audits
Start with data. You can’t manage what you don’t measure. Firms should conduct internal assessments of their fleet’s fuel consumption and emissions profile. Tools like the Global Logistics Emissions Council (GLEC) Framework can help create a baseline.
2. Pilot low-emission alternatives
Instead of wholesale fleet changes, firms can start small by piloting one or two electric or dual-fuel trucks. Companies like Medessy Energies offer conversion kits for diesel trucks that reduce emissions and operational costs.
3. Partner with clean energy providers
Explore strategic alliances with CNG distributors, EV manufacturers, and renewable energy providers to ensure availability and support.
4. Green branding and storytelling
Don’t just go green – market it. Highlight your commitment to sustainability in your corporate communications and proposals. It can be the difference in winning big contracts from eco-conscious clients.
5. Collaborate with policymakers
Haulage associations and transport unions should engage government on crafting incentives for early adopters – whether through waivers, pilot grants, or recognition programmes.
When logistics companies go green, the impact reverberates. Reduced fuel imports ease pressure on Nigeria’s forex reserves. Lower emissions improve public health. And cleaner transport supports sustainable agriculture, e-commerce, and industrial growth.

According to a McKinsey report, greening Africa’s transport sector could create over 5 million new jobs by 2030 through manufacturing, maintenance, and services.
Nigeria, with its entrepreneurial energy and vast consumer base, should not be left behind.

Conclusion
Green logistics is not just about the environment. It is about efficiency, innovation, competitiveness, and resilience. For Nigerian haulage firms, the transition to low-emission operations is both a business and moral imperative.

The first movers will gain reputational advantage, access to funding, and alignment with global trade partners. The laggards will face rising costs, regulatory backlash, and shrinking market share.
As the world demands cleaner supply chains, the Nigerian logistics industry must respond—not with hesitation, but with bold, practical steps.
The road to sustainability is long, but the journey begins with a single, green mile.

About the Author
Ernest Eleodinmuo is the CEO of NNORUKA ELEODINMUO GLOBAL SERVICES LTD, a leading Nigerian haulage firm with over a decade of experience in logistics, shipping, and freight forwarding. He writes from Lagos, Nigeria.