Interview: Adetayo Bamiduro
How has digitalisation transformed the transport and logistics landscape in Nigeria?
ADETAYO BAMIDURO: Transport networks in Nigeria have traditionally been informal, which in turn has resulted in a paucity of organisation and transparency. This has made it difficult to keep track of financial flows, and has entrenched the activities of special interest groups. Technology has reduced the inefficiencies in and increased the safety of informal transport and logistics in the past 40 years, and companies such as Uber and Gokada have helped bridge the gap between commuters and merchants and transport operators.
The digitalisation of credit has brought together financing, transport providers and the small and medium-sized enterprises that need vehicles. Traditionally, obtaining a vehicle with limited funding required resorting to local cooperatives, union chiefs or microfinanciers. Digitalising the process is improving credit supply and transparency in the mobility space. An auxiliary impact of technology is the digitalisation of value-added services such as insurance, which has low penetration in Nigeria. Beyond enabling access to affordable finance, technology has helped ensure that transport operators can access a suite of services, from auto insurance to maintenance plans, facilitating a safe, efficient and effective customer experience.
In what ways has digitalisation in transport and logistics improved financial inclusion?
BAMIDURO: Leveraging the power of data and engineering, innovative data-assessment techniques have been key to deepening financial inclusion. Although there is a lack of traditional data, the exponential increase in the mobile penetration rate affords the opportunity to evaluate credit worthiness more accurately and extend credit to an underserved population. Vehicle subscriptions can now be approved without a down payment, a development made possible by new approaches to analytics, data and credit assessment.
This unlocks access to finance and drives financial inclusion in the sector, which can be replicated across all segments of the Nigerian economy.
To what extent is a revenue-based funding model conducive to accessing affordable vehicle financing?
BAMIDURO: Vehicle subscription is a more apt term for the ideal funding model, as it entails access to a vehicle based on need as opposed to revenue generation. The benefits of this model go beyond the gig economy by democratising access to vehicles, enabling small business owners to secure a vehicle to make a delivery or an individual to lease a motorcycle for personal mobility. Moreover, the model creates flexibility and autonomy by removing durational and geographic limits, with access to a vehicle based solely on need. Decoupling vehicle access from ownership is necessary to engendering affordable mobility in Nigeria and across Africa.
What is the potential for Nigeria’s electric mobility sector in the near future?
BAMIDURO: The current adoption rate of electric vehicles (EVs) is 1%, which is to be expected given that the market share of EVs in Western markets is less than 10%. The more salient issue is ascertaining the barriers to the adoption and upscaling of electric mobility on the continent. One hurdle is the availability and cost of critical infrastructure, principally battery charging and swapping stations. The investment required to accelerate adoption is often government-driven through fiscal incentives such as rebates, which are limited in Nigeria. A second obstacle is the huge amount of capital required up front to facilitate the transformation of internal combustion engine vehicles to EVs, even though the latter is more economical over the long term due to significantly lower maintenance costs. Unfortunately, the investment flow needed to drive wide-scale adoption lags behind the high levels of interest in electric mobility in Nigeria and across the continent.
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