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Chairman of SIFAX Group, Dr Taiwo Afolabi, has urged prospective investors in Nigeria’s logistics sector to prioritise cargo demand, operational efficiency and cash flow generation rather than focus solely on acquiring physical assets such as trucks, warehouses and equipment.
Afolabi stressed that the profitability and long-term sustainability of logistics investments depend largely on customer demand, effective asset utilisation and the ability to generate adequate returns on invested capital.
He gave the advice while delivering a speech at the 2026 Annual Strategy Retreat of Odu’a Investment Company Limited, held at the International Institute of Tropical Agriculture (IITA), Moniya, Ibadan. He was represented by Oliver Omajuwa, Deputy Director, Strategy and Operations.
The SIFAX Group chairman identified warehousing, transportation, agricultural aggregation, cold-chain services, technology and specialised logistics as promising investment opportunities, urging investors to identify gaps across the logistics value chain before committing resources.
He also advised Odu’a Investment Company Limited to assess the transportation, storage and distribution needs of its portfolio companies, noting that their combined logistics requirements could provide a viable foundation for establishing a shared logistics platform.
According to Afolabi, investment opportunities in port logistics go beyond terminal operations to include cargo handling, freight forwarding, customs clearing, equipment maintenance, storage and export consolidation.
He explained that integrating these services would streamline cargo movement, reduce operational complexities and provide customers with access to multiple logistics solutions through a single platform.
On agricultural logistics, Afolabi observed that increased agricultural production would deliver limited economic benefits without adequate infrastructure for aggregation, preservation, storage and distribution.
He identified cold rooms, temperature-controlled transportation and strategically located warehouses as critical investments for linking agricultural production to processing facilities, retail markets and export destinations.
The SIFAX Group chairman further encouraged investors to consider greenfield developments, acquisitions and strategic partnerships with established operators, depending on their financial strength, technical expertise and identified market opportunities.
He also highlighted the importance of technology-driven solutions, particularly cargo tracking, inventory management and operational monitoring systems, in improving visibility, efficiency and service delivery across the logistics value chain.
However, Afolabi cautioned investors against prioritising asset ownership over commercial viability, emphasising that acquiring trucks, constructing warehouses or purchasing equipment does not automatically translate into profitability.
He urged prospective investors to carefully evaluate customer requirements, asset utilisation, cash conversion and returns on invested capital before venturing into the logistics business.
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